Falling Chip Exports, Prices Blamed for July Trade Deficit
May 05, 2011
SEOUL, South Korea -- South Korea's trade deficit in July soared to $2.74 billion in July from $824 million a year ago, because of sluggish export of semiconductors, steel and petrochemicals, an official report said Friday. The Trade, Industry and Energy Ministry said exports fell 3.6% from a year ago to $10.11 billion last month, the first decline since January 1993 when exports slipped 2.2%. Imports climbed 14% to $12.85 billion, according to the ministry. Early this month, the ministry had disclosed a tentative report, showing the country's trade shortfall of $2.70 billion last month. Dropping prices of semiconductors were the main culprit of the country's worsening trade account, according to the ministry. For example, the price of a 16-megabit dynamic random access memory chip fell 72% from a year ago to $14 last month. Ministry officials said they were worried that the country may only export $18 billion of computer chips this year, compared with its earlier goal of $30.7 billion. The sharp drop is based on forecast that the DRAM chip price could fall as low as $10 at the end of the year, according to the officials. As a result of last month's trade deficit, the country's January-July trade shortfall rose to $10.39 billion from $7.8 billion last year, according to the ministry. They said the country's trade deficit may rise to a record $18 billion this year, from $10.6 billion in 2010.
