(March 17): South Korea’s semiconductor exports to China plunged last month, deepening concerns about a cooling in global demand already threatened by US tariffs, as Washington steps up its restrictions on technology supplies to Beijing.

Chip sales to the world’s second-largest economy including Hong Kong fell 31.8% from a year earlier, according to South Korea’s Trade Ministry. That’s bigger than the 22.5% contraction reported for January and comes after a 2024 rally that helped fuel South Korea’s economic growth.

The decline at the beginning of this year coincides with the US implementing its export restrictions on cutting-edge semiconductors to China. The Department of Commerce in December slapped fresh curbs on the sale of high-bandwidth memory chips to China, seeking to keep Beijing from advancing in the fields of artificial intelligence and other technological ambitions.

SK Hynix Inc and Samsung Electronics Co are two of the world’s biggest memory-chip makers and also operate semiconductor plants in China. The country received about two fifths of South Korea’s entire technology exports as of the end of 2024, but the flow of chips appears to be slowing as a mixture of reasons drags down South Korea’s key trading sector.

South Korea’s total semiconductor exports slipped 3% from a year earlier in February, according to the government data. Declining prices in conventional memory chips and a technological transition in semiconductor production were among reasons the growth in exports slowed, the ministry said in a statement released on Sunday.

The growing challenges in exporting chips pose a risk for South Korea’s economy, which is expected to lose momentum compared with last year as US President Donald Trump imposes tariffs and private spending remains weak. The nation is also struggling to emerge from the economic impact of the turmoil triggered when President Yoon Suk Yeol briefly declared martial law in December.

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