As Taiwan and China's export competitiveness improves, semiconductor competition between Korea and major East Asian countries is intensifying.

According to the report titled ‘Analysis of Export Competitiveness of Major Competitors in East Asia’ published by the Federation of Korean Industries (FKI), Taiwan and China are intensifying their pursuit in the semiconductor export sector. It was revealed that there are concerns that Korea's semiconductor export competitiveness will weaken as competition for semiconductor exports among East Asian semiconductor producing countries intensifies.



As a result of analyzing the changes in major export competitors in East Asia over the past 10 years, the export volume growth rate by country in the semiconductor sector was as follows: △China 255.9% (USD 32.9 billion in 2011 → USD 117.1 billion in 2020), △Taiwan 246.1% (356 → 1,232), △Korea 108.8% (397 → 829), and △Japan -9.7% (320 → 289).

During the same period, the increase or decrease in export share by country was as follows: China 7.2%p (7.7% in 2011 → 14.9% in 2020), Taiwan 7.0%p (8.6 → 15.6), Korea 1.0%p (9.5 → 10.5), and Japan -2.9%p (6.6 → 3.7).

Excluding Japan, the export volume and market share of China, Taiwan, and Korea all increased, but the export volume growth rate of China and Taiwan was more than twice that of Korea. The report noted that concerns are raised about the competitiveness of Korea's semiconductor exports, as Taiwan's export volume and market share have surpassed those of Korea.



Competition is also intensifying in electrical appliances, which account for the largest share of Korean exports (31.2%, 2021). Looking at the export growth rate by country, Taiwan 129.4% (USD 76.1 billion in 2011 → USD 174.6 billion in 2020), China 59.3% (USD 4,458 → 7,101), Korea 34.8% (USD 1,185 → 1,597), and Japan -20.8% (USD 1,295 → 1,026), with Taiwan and China's export growth rates outpacing Korea's.

In terms of the increase or decrease in export share by country during the same period, China recorded 4.6%p (21.0% in 2011 → 25.6% in 2020), Taiwan 2.7%p (3.6 → 6.3), Korea 0.2%p (5.6 → 5.8), and Japan -2.4%p (6.1 → 3.7), showing that China and Taiwan showed higher increases than Korea.



As export competition between major East Asian countries becomes increasingly fierce, export competition is intensifying, particularly in the semiconductor sector. In the export competitiveness index between Korea and major East Asian countries, the semiconductor sector increased by △Korea-China 3.7%p (81.7% in 2011 → 85.4% in 2021), △Korea-Japan 2.4%p (58.3% → 60.7%), and △Korea-Taiwan 15.1%p (17.3% → 32.4%), making competition with all major countries fierce.

In addition, the export competitiveness index of electrical equipment is in the following order: Korea-China -10.5%p (63.5% in 2011 → 53.0% in 2021), Korea-Japan -6.5%p (63.5% → 57.0%), and Korea-Taiwan 7.3%p (73.9% → 81.3%), which is interpreted as a partial easing of Korea's export competition. However, export competition with Taiwan increased for both semiconductors and electrical equipment, showing a notable intensification of export competition between Korea and Taiwan.

Kim Bong-man, head of the International Headquarters of the Federation of Korean Industries, insisted on the establishment of a strategy to strengthen competitiveness in order to respond to countries with high export competition such as Taiwan and China, and emphasized, “We must strengthen national support for key industries such as semiconductors and discover new growth engines for exports.” He also added, “Regulatory deregulation is necessary to strengthen corporate competitiveness, which is the basis for export competitiveness.”