March 18, 2025 /SemiMedia/ — South Korea’s semiconductor exports to China saw a sharp decline in February, as the United States tightened its restrictions on technology exports to China. This downturn has raised concerns about weakening global demand under the pressure of U.S. trade policies.

According to South Korea’s Ministry of Trade, chip exports to China fell by 31.8% year-over-year in February, marking a steeper decline compared to the 22.5% drop recorded in January. This slump follows a brief recovery in 2024, which had initially fueled South Korea’s economic growth.

The decline coincided with new U.S. export restrictions targeting China’s semiconductor industry. In December 2024, the U.S. Department of Commerce imposed additional controls on high-bandwidth memory (HBM) chips, aiming to curb China’s advancements in artificial intelligence (AI) and other cutting-edge technologies. Samsung Electronics and SK Hynix, the world’s two largest memory chip makers, both operate semiconductor facilities in China. As of late 2024, China accounted for about 40% of South Korea’s total tech exports.

Beyond geopolitical factors, structural changes in the semiconductor market also contributed to slowing exports. South Korea’s overall semiconductor exports declined by 3% year-over-year in February. Falling memory chip prices and an industry-wide shift in semiconductor manufacturing technologies further pressured export growth.

The ongoing challenges in chip exports pose risks to South Korea’s economy. Analysts warn that trade tensions, including tariffs imposed by former U.S. President Donald Trump, have already weighed on South Korea’s economic performance. Additionally, weak global demand and sluggish private spending could further dampen growth prospects.