The nation’s industrial sector suffered one hardship after another in 2023.

The year saw global supply chain risks on the back of the COVID-19 pandemic and the Russia-Ukraine war, while many countries prioritized their own interests when adopting industrial policies with the U.S.-China power struggle growing fiercer.

Washington introduced the U.S. Inflation Reduction Act and the European Union(EU) implemented the Carbon Border Adjustment Mechanism, while China curbed exports of key minerals such as graphite.

Such moves impacted South Korea as the U.S., the EU and China are all key export markets where local firms have made inroads.

Due to the deepening row between Washington and Beijing, the U.S. put in place new restrictions on the export of semiconductors to China, which together with China’s move to weaponize its resources triggered a reconstitution of global supply chains.

On top of the situation, key economies are set to post growth in the one- or two-percent range due recessionary trends resulting from high interest rates, high consumer prices and high global oil prices.

A protracted downturn in the semiconductor industry caused Samsung Electronics' operating profit for the first and second quarters to slip below one trillion won for the first time in 14 years. Another major semiconductor firm, SK Hynix, posted a deficit of eight trillion won through the third quarter.

Risks related to the global supply chain overhaul and the Russia-Ukraine war as well as the ramifications of recessionary conditions are expected to remain for the time being, thus continuously weighing on South Korea’s economy.

Photo : YONHAP News

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