South Korean manufacturing production excluding semiconductors grew by only 0.2% [1] during the first quarter of 2024.
This disparity highlights a deepening "K-shaped" industrial polarization where the broader economy remains dependent on a single sector for growth. While the semiconductor industry booms, other manufacturing areas and service sectors struggle to keep pace.
The overall growth rate of the Korean economy in the first quarter of 2024 was 1.7% [1]. However, the semiconductor sector provided 55% [1] of that growth, masking the stagnation in other industries. Specifically, semiconductor manufacturing production surged 14.1% [1] compared to the previous quarter.
Economic analysts point to sectoral differences as the primary driver of this divide. Gains were concentrated in finance and insurance, fueled by stock-market performance, while the lodging and food services sectors experienced a sharp decline [2]. This trend suggests that the recovery is not being felt equally across the domestic economy.
Despite the uneven distribution of growth, the outlook for the year remains positive. The Hyundai Economic Research Institute forecast that the economy will grow by 2.7% [1] in 2024, driven largely by strong semiconductor exports [3].
"In the first quarter, manufacturing production growth excluding semiconductors was limited to 0.2%," a YTN News anchor said [4].
“Manufacturing production excluding semiconductors grew by only 0.2% during the first quarter of 2024.”
The data reveals a structural vulnerability in South Korea's economy, where macroeconomic growth figures are heavily skewed by the semiconductor cycle. The K-shaped polarization indicates that while high-tech exports are thriving, the domestic service sector and non-chip manufacturing are not benefiting from the recovery, potentially widening the economic gap between different industrial classes.
