According to a report submitted to People Power Party (PPP) lawmaker Park Seong-hoon and released on Monday, the Bank of Korea (BOK) said the current semiconductor upcycle differs from previous ones because it is being driven by intense investment as companies race to gain an early edge in the artificial intelligence (AI)-led transformation of the technology industry.
On the supply side, the technological complexity of advanced chips means that it takes considerable time to increase mass-production capacity, while the growing importance of customized products such as high-bandwidth memory, or HBM, further limits manufacturers' ability to respond quickly.
Given the imbalance between rapidly growing demand and constrained supply, the central bank said the global semiconductor industry is likely to remain in an expansionary phase for a considerable period.
The current cycle has been supported by strong investment in data centers and other AI infrastructure, producing growth far stronger than during previous semiconductor upturns, according to the BOK.
The expansion began in March 2023 and had continued for 40 months as of June, already exceeding the average of 29 months recorded during five upcycles between 2000 and 2020.
Although the unusually long cycle has fueled concerns that the industry may be approaching a turning point, the BOK said its duration alone was insufficient to signal a peak, given structural AI demand and limited production capacity.
JPMorgan, Goldman Sachs and Morgan Stanley generally expect the global semiconductor industry to remain strong through at least 2027, despite uncertainty over the speed, scope and profitability of AI adoption, the central bank said.
The outlook represents an extension of the BOK's previous assessment that the semiconductor upcycle would continue at least through 2026.
South Korea's customs-cleared semiconductor exports increased 171.4 percent from a year earlier in April and 167.7 percent in May, underscoring the continued strength of overseas demand.
Chip exports surged 199.5 percent in June to a record $44.82 billion, surpassing $40 billion for the first time and helping the country's overall monthly exports exceed $100 billion for the first time.
Samsung Electronics also estimated second-quarter revenue at a record 171 trillion won and operating profit at 89.4 trillion won, both the highest quarterly figures in the company's history.
The operating profit exceeded the market consensus of roughly 84 trillion to 85 trillion won, although it came slightly below some of the more bullish forecasts of around 90 trillion won issued shortly before the announcement.
Samsung shares nevertheless fell about 7 percent on the day of the announcement, as investors took profits following a sharp rally and weighed whether the AI-driven surge in memory earnings could be sustained.
The BOK acknowledged that uncertainty remains over how quickly and widely AI technology will spread and whether related services can generate sufficient returns.
Still, the central bank's assessment suggests that the recent correction in chip shares does not by itself indicate that the underlying industry cycle has peaked, as manufacturers remain unable to increase advanced-chip supply rapidly while data center investment continues.
BOK governor Shin Hyun-song is expected to address the semiconductor outlook and broader economic conditions following the Monetary Policy Board's rate-setting meeting on Thursday.
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