One signal

The Bank of Korea has modelled a sharp downside for South Korea if major US technology firms slow their AI infrastructure spending: semiconductor exports could come in US$50bn to US$100bn below earlier forecasts.

The scenario assumes a 10% fall in Korean chip prices. The Bank says the resulting shortfall could trim 0.4 percentage points from South Korea’s GDP growth in 2027. The Straits Times reports the figures from a written response to a lawmaker. This is a pessimistic scenario, not a forecast that the slowdown will happen. Still, it puts numbers on how exposed South Korea’s chip-heavy economy could be if the AI spending boom loses pace.

Discuss: Is that a useful warning for planning, or too uncertain a scenario to shape policy?

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