South Korea's trade deficit shot up to a record in January, and analysts say there's a one-word explanation: semiconductors.
Government figures show that exports of computer chips tumbled more than 44% from a year earlier.
One big factor was a fall in sales to China — which last year made up more than 40% of South Korea's total semiconductor exports.
Prices and demand are both down in global markets, especially for lower-end memory chips.
That's hit two of South Korea's leading semiconductor makers: SK Hynix and Samsung Electronics — both of which recently reported drops in sales.
It's a somewhat different story for more complex integrated circuit chips — a sector dominated by Taiwan.
Two weeks ago, Taiwan's government announced its exports of IC chips rose in 2022 for the seventh year in a row.
While trade numbers show past performance, stock prices largely reflect future expectations.
And despite global uncertainty, investors are showing optimism for much of the sector.
After losses of more than 20% last year, shares of South Korea's Samsung and SK Hynix as well as Taiwan's TSMC are all up between 11% and 28% so far this year.
