South Korea chip shipments jump most since 1997 as Samsung beats

South Korea’s semiconductor shipments rose in December by the most since 1997 while inventory growth slowed further, underscoring the pace at which a backlog of computer memory is being cleared in the country’s most important industry.

Factory shipments increased 113.7% from a year earlier while inventories grew 11.6%, the smallest rise since late 2022, according to data released Wednesday by the national statistics office. Separately, production grew 53.3% from a year earlier, the most since mid-2016.

The numbers coincided with Samsung Electronics Co., the world’s largest memory-chip producer, announcing 21.7 trillion won ($16.3 billion) in semiconductor sales last quarter, larger than forecast. Still, the chip division posted 2.2 trillion won in operating losses, indicating the slump in South Korea’s biggest sector has yet to fully abate.

South Korea’s semiconductor manufacturers have been conservative in expanding their output since demand collapsed in the wake of a pandemic-era boom in 2022. That’s helped stem price declines in memory chips, but it will be a while before the industry sees a full-fledged boom again, according to analyst groups, including TrendForce, a Taiwan-based researcher.

South Korea accounts for two-thirds of memory chips produced in the world and its semiconductor industry serves as an indicator of global technology demand. The government is pinning hopes on a sustained recovery of semiconductor exports to drive an acceleration in its economic expansion this year.