Smartphone chips drive surprise gain in Korean industrial output
South Korea’s industrial production unexpectedly rebounded in February as demand for semiconductors rose with the release of new smartphones from Samsung Electronics Co. and Apple Inc.
Factory output increased 2.4 percent from a year earlier, Statistics Korea said Thursday, compared with a 0.2 percent decline estimated by economists in a Bloomberg survey. The gain was 3.3 percent when measured month-on-month. Semiconductor production surged almost 34 percent from a year ago.
"Korean production got a boost thanks to Samsung’s S7 and to Apple releasing a new iPhone around the same time," said Lee Sang Jae, a Seoul-based economist for Eugene Investment & Securities Co. "It’s too early to tell whether this will be a trend and overall exports are still falling."
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Falling exports and insufficient domestic consumption prompted the government to bring forward more spending in the annual budget to the first quarter. Overseas shipments fell for a 14th month in February and the unemployment rate jumped to a six-year high at 4.1 percent.
Bank of Korea Governor Lee Ju Yeol said on Wednesday that economic growth may fall below 3 percent this year.
The finance ministry forecasts factory production to improve in March as consumption tax discounts on cars begin to kick in, it said in a statement Thursday.