June 3, 2024 /SemiMedia/ -- South Korea’s semiconductor inventories saw their biggest drop since 2014 as demand is outstripping supply at a faster pace as customers step up purchases of equipment needed to develop artificial intelligence (AI) technology, according to Bloomberg.

The report pointed out that South Korea's chip inventory fell 33.7% in April from the same period last year, the largest drop since the end of 2014. This is also the fourth consecutive month of inventory decline, while South Korea's semiconductor exports have rebounded.

Bloomberg: South Korea's chip inventory fell 33.7% year-on-year in April-SemiMedia

In addition, South Korea's chip production increased by 22.3% in April, lower than the 30.2% growth in the previous month. Factory shipments increased by 18.6%, also lower than the 16.4% in March.

The report also pointed out that during the memory chip boom from 2013 to 2015, inventories did not increase for about a year and a half. In the 2016-2017 cycle, inventory declines lasted for nearly a year. As the artificial intelligence boom is stimulating demand in a similar way to the expansion of cloud servers in 2016, the latest chip rally is expected to continue at least until the first half of next year.