The Bank of Korea has warned of potentially serious economic consequences from a slowdown in investment in artificial intelligence. If US technology companies reduce spending on AI infrastructure in 2027, South Korea's semiconductor exports could fall short of previous forecasts by as much as $100 billion. The country's economic growth could also be threatened, as its economy remains heavily reliant on the global technology boom.
South Korea is one of the world's leading manufacturers of semiconductors, and its economy has benefited significantly in recent years from the growing demand for chips used in artificial intelligence systems. However, the Bank of Korea now warns that this dependence could pose a significant risk.
According to data released by Reuters on October 27, a slowdown in investment by major US technology companies could result in South Korea's semiconductor exports being $50 to $100 billion lower than previously forecast next year.
This is according to a written statement from the central bank, which was presented to South Korean lawmaker Ahn Do-geol during a parliamentary review.
A slowdown in AI investment could affect the entire economy
The central bank has developed a pessimistic scenario that takes into account possible restrictions on capital expenditures by US technology giants. The companies whose investment activity the bank has been monitoring include Amazon, Google, Microsoft, Meta, and Oracle.
These companies are investing heavily in data centers, computing infrastructure, and other technologies essential for the development of artificial intelligence.
Their investments are driving demand for semiconductors, which are one of South Korea's most important export products.
In a worst-case scenario, the central bank expects that the unit prices of South Korean semiconductors will fall by approximately 10 percent compared to previous expectations.
According to the bank, such a development could reduce the growth rate of South Korea's gross domestic product in 2027 by approximately 0.4 percentage points.
The current account surplus could also be significantly reduced. The central bank's original forecast for 2027 projected a surplus of $430 billion.
Semiconductors account for nearly half of South Korea's exports
The vulnerability of the South Korean economy is related to the exceptionally strong position of the semiconductor industry.
According to data from South Korean customs authorities, the country's exports reached a record high of $120.9 billion in September 2026. Semiconductors alone accounted for approximately $60.3 billion of this amount, nearly half.
October data also confirms the ongoing technology boom. In the first twenty days of the month, South Korea's exports increased year-on-year by 105.4 percent, while semiconductor exports increased by 222.5 percent.
This rapid growth presents significant opportunities for South Korean manufacturers. At the same time, it means that any reduction in global investment in AI could have much broader economic consequences than just a decline in revenue for technology companies.
The South Korean economy is currently exceeding expectations
The central bank's warning comes at a time when the South Korean economy is performing better than analysts had predicted.
According to preliminary data released on October 27, South Korea's GDP grew by 1 percent quarter-on-quarter in the third quarter of 2026, while economists polled by Reuters had expected growth of only 0.7 percent.
In the second quarter, the economy grew by 0.6 percent.
Semiconductor exports and investments in production facilities played a significant role. Foreign trade supported export growth by 2.3 percent in the third quarter, and investments in equipment increased by 4.1 percent.
According to representatives of the South Korean central bank, the semiconductor industry is responsible for approximately half of the current economic growth.
However, the situation is not equally favorable in all areas of the economy. Private consumption fell by 0.2 percent in the third quarter, for the first time in nearly four years.
In addition to the potential for reduced investment in artificial intelligence, the South Korean central bank also points to uncertainty regarding the future development of the memory chip market.
Their production and sales undergo cyclical changes, with periods of increasing demand and prices being followed by slowdowns or declines.
Another risk is the increasing production capacity of competitors, including Chinese companies. A larger supply of semiconductors could put pressure on their prices if demand is weak.
According to the South Korean central bank, a more significant decline in exports and economic growth could also increase pressure on the South Korean won to weaken.
The published data do not yet indicate that the South Korean semiconductor industry is facing an imminent crisis. On the contrary, the current results confirm very strong foreign demand and continued growth in production.
The central bank itself emphasizes that the future development of investments in artificial intelligence and the memory chip market remains highly uncertain.
However, this warning shows how closely the economic performance of one of the largest Asian economies is linked to the decisions of a few American technology companies.
If the global development of artificial intelligence continues at the current pace, the South Korean industry could benefit from further growth in demand. Conversely, any reduction in investment in data centers and technological infrastructure could affect not only semiconductor manufacturers, but also the broader South Korean economy.