South Korea's semiconductor industry's output and shipments both recorded their largest growth in years in November, which bodes well for South Korea's economic prospects next year and the global technology industry.

Data released by Statistics Korea today show that chip production increased by 42% year-on-year in November, the largest increase since the beginning of 2017, while shipments soared by 80%, the largest increase since the end of 2002. Inventories rose 36%, the smallest increase since February.

These data reflect that the most important industry for South Korea is recovering from the downturn of more than a year, and at the same time add optimistic signals to Samsung Electronics and SK Hynix, the two major chip manufacturers. The data also suggest that a tentative recovery in demand from the global technology industry may be making progress.

South Korea's trade-reliant economy is in disarray in 2023 as demand for semiconductors is suppressed, with the Bank of Korea forecasting growth of 1.4% this year, down from 2.6% last year, amid rising interest rates, a slowdown in China and geopolitical risks.

The latest semiconductor data highlights how South Korea's technology manufacturers could help support economic growth. The stronger boom in the semiconductor industry drove South Korea's industrial production to grow 5.3% in November from a year ago, which was better than expected. South Korea's Ministry of Planning and Finance said in a statement that market demand for high-performance semiconductors has driven the recovery of the chip and machinery industries.

The Bank of Korea predicts that after exports resume growth in October this year, South Korea's economy will grow by 2.2% next year, supported by further strengthening of exports. As demand for emerging technologies such as artificial intelligence increases, memory chip prices have begun to rebound.

Despite this, the South Korean economy still faces some risks, including the possibility that global economic growth will slow down next year, global business activities continue to face the threat of protectionism, and U.S. consumers feel the pressure brought by the long-term high interest rate environment.

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