Containers are stacked at a port in Pyeongtaek, Gyeonggi, on July 1.YONHAP
The Bank of Korea (BOK) dismissed claims that the semiconductor boom has already peaked, stating that the global semiconductor market is expected to "continue expanding for a considerable period."
The current upcycle remains intact because "supply has expanded more slowly than demand, which has surged due to investment in AI infrastructure," the BOK said in written responses submitted to Rep. Park Sung-hoonof the People Power Party on Monday.
"The technical complexity of high-performance products means mass production takes considerable time," the BOK explained. "Supply expansion is more constrained than in previous cycles because demand is being led by customized products such as high bandwidth memory."
The BOK also said the current expansion differs from previous semiconductor cycles because "it is being driven by companies making competitive investments amid expectations that the spread of AI will fundamentally reshape the industrial ecosystem."
"The current semiconductor cycle is showing much stronger momentum than previous expansions, supported by robust global investment in AI infrastructure such as data centers," the BOK wrote.
The central bank stated that the current semiconductor upcycle has now continued for 40 months since March 2023, already exceeding the average 29-month duration of the five expansion cycles recorded between 2000 and 2020.
The BOK also cited forecasts from major global investment banks as further evidence that the semiconductor boom still has room to run.
"Although uncertainties remain regarding the pace and scope of AI adoption and profitability, major investment banks such as JPMorgan, Goldman Sachs and Morgan Stanley generally expect the global semiconductor market to remain strong at least through next year," it said.
General semiconductor illustrationJOONGANG ILBO
The assessment represents a more optimistic outlook than the BOK's previous forecast that the semiconductor boom would continue through this year.
“The semiconductor cycle is likely to continue through next year [2026]," the then-director general of the research department, now BOK deputy governor Lee Ji-ho said during an economic outlook briefing last November. "It is difficult to say whether it will extend into 2027."
Former BOK governor Rhee Chang-yong also addressed this issue during a January news conference.
“Regardless of who ultimately wins in the AI industry, semiconductors will still be needed," he said. “I expect the sector to remain favorable at least over the next year."
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
