As the semiconductor industry enters a recovery phase in the second half of the year, it has been found that semiconductors are making a significant contribution to the domestic manufacturing production index and capacity utilization rate.

According to the 'August Industrial Activity Trends' released by Statistics Korea on the 4th, the all-industry production index in August stood at 112.1, up 2.2% from the previous month; this figure marked the largest increase in 30 months, driven by a rebound in semiconductor production.

According to the announcement by Statistics Korea, manufacturing production recorded -3.8% due to a decrease in electronic components, but increased by 5.6% in August compared to the previous month, showing growth in semiconductors (13.4%), machinery and equipment (9.7%), and automobiles (5.7%).

Recently, the semiconductor industry recorded $9.9 billion in semiconductor exports in September, the highest figure since last October, driven by a boom in AI-oriented memory, improved inventory levels, and a slowdown in the price decline of DRAM and NAND product lines. According to the Ministry of Trade, Industry and Energy, the trade balance in September showed increases of 13.6% for semiconductors, 9.5% for automobiles, 4.2% for displays, and 8.5% for home appliances.

Looking at the manufacturing production capacity and capacity utilization indices, the semiconductor sector made a significant contribution, with production capacity increasing by 0.3% compared to the previous month and the capacity utilization index increasing by 13.5% compared to the previous month, driving a 5% increase in the overall capacity utilization index.

However, semiconductor inventory increased by 15.3% compared to last month and by 65.7% compared to the same period last year, indicating that inventory management is still expected to be important. Inventory in the automotive sector also increased by 7.9% compared to last month.

According to the report, when looking at the manufacturing inventory-shipment cycle on a monthly basis, shipments are showing a trend of shrinking decline from -5.9% to -2.8%, while inventory is showing an expanding trend from 5.2% to 10.5%.

In terms of stimulating consumption, it is analyzed that the slowdown in IT product spending has been resolved as external conditions improve, and consumption is increasing due to seasonal demand. It appears that the successive launches of new flagship smartphones by Samsung and Apple in the second half of the year are driving IT consumption across the entire market.

According to domestic industrial activity trends in August, while consumption trends showed a 1.1% decrease in durable goods compared to the previous month, sales of durable goods such as telecommunications equipment, computers, and home appliances increased.

The Ministry of Economy and Finance assessed that signs of an economic rebound are expanding as positive signals, centered on production, emerged from the August industrial activity indicators.