China, Japan 'political deficit', record trade deficit for 11 consecutive months

The trade deficit recorded a record high of $12.7 billion in January, with the 11th consecutive month of trade deficit concentrated in neighboring countries.
South Korea's export decline is China's third consecutive month of decline since October last year, Japan's export decline for 9 consecutive months since April last year, and Taiwan's export record of 3 consecutive months of decline since September last year, which seems to be a political trade hit.
Exports decreased by 16.6% year-on-year to $46.27 billion, and imports decreased by 2.6% to $58.96 billion, which is structural and wider. The sharp decline in semiconductors came from memory semiconductors such as DRAM and NAND, and Samsung accumulated a large inventory. Due to deficits in neighboring countries, exports of semiconductors to China, the largest export market for semiconductors, decreased by 46.6%, and the trade deficit with Japan was 17 months It is a deficit of 19.93 trillion yen (185.1094 trillion won) last year.
The trade deficit released by the Ministry of Trade, Industry and Energy showed that exports of its most important export item, computer chips, fell nearly 45 per cent year-on-year last month due to slowing demand and falling chip prices.
The Ministry of Trade, Industry and Energy said exports fell nearly 17 per cent during January from a year earlier, and modest increases in car, petroleum products and ship sales did not offset the larger decline in semiconductor shipments.
Samsung Electronics' operating profit of 4.3 trillion won ($3.5 billion) in the three months to December fell 69% from a year ago, recording the lowest quarterly profit since the third quarter of 2014, and sales 8 It came out right after the announcement of a record of 70.46 trillion won ($57.2 billion), a decrease of %.
Following Samsung, SK Hynix reported an operating loss of 1.7 trillion won ($1.4 billion) for its first loss in the fourth quarter of last year (October-December).
The international chipmaking business is very cyclical, and the tech industry has gone from a sharp shortage of computer chips to oversupply in many industries, including automobile manufacturing, and Samsung Electronics has continued to ramp up production.
SK Hynix previously announced plans to cut its investment by more than half in 2023 compared to the 19 trillion won ($15 billion) it spent last October.
Samsung said on the day that chip prices fell sharply as demand weakened as customers restocked in the face of "increasing uncertainty" in the global economy.

The four major conglomerates, Samsung Electronics, SK Group, Hyundai Motor Group, and LG Group, announced their investment in the US right after the Korea-US summit, at a scale of 70 billion dollars (91.9 trillion won), Samsung Electronics' new foundry plant, and SK's semiconductor manufacturing facility battery The joint venture, Hyundai Motor’s electric vehicle plant, and LG battery plant were invested in the United States.

The justification is to expand the global supply chain as a result of the summit and strengthen strategic investment following preoccupation in the US market.

On July 26 of last year, SK Chairman Chey Tae-won talked about a new investment of $ 22 billion in the United States in a video meeting with President Biden, and a total of $ 30 billion was announced as an investment in the United States until the announcement of an investment of $ 7 billion just before.
In the wake of the Korea-US summit (May 2022), the expansion of new overseas investment by domestic conglomerates increased the foreign currency debt of 7 semiconductor battery petrochemical companies by 1.58 trillion won in the first half of last year.
The rapid increase in foreign currency debt is due to LG Energy Solutions, which has chosen to invest in batteries exclusively for each company in line with the receipt of US subsidies by major automakers in battery factories in the United States. It has become a link in which domestic stock prices soared.
Samsung SDI's short-term foreign currency borrowings, which are expanding US investments, increased by 15.7% from 835.7 billion won to 967.4 billion won in six months.
The government has applied 'overseas income exemption (based on source holding)' by paying corporate tax to US local corporations through 'reorganization of double taxation adjustment method for overseas dividend income' for chaebol's investment in the US, allowing chaebol companies to pay 780 billion won in corporate tax in Korea. Declining will be announced in May last year.
<The vicious cycle of foreign currency debt in 7 conglomerates expanding US investment, September 8, 2022. Institutionalization of Blocking Remittance to Korea from Payment of Corporate Tax by American Corporations of Chaebol, May 30.>

The sharp decline in semiconductor exports in January was $6 billion, down 44.5% ($4.8 billion) from the previous year, accounting for 52% of the total decrease in exports in January.
The decline in Chinese exports is getting stronger after continuing for the eighth month (-0.8%) since June last year, with semiconductor exports plummeting to 46.6% (1-25 days).
Semiconductor exports to China maintained a level of 4 billion dollars for 16 consecutive months until September of last year, then decreased sharply (22.0%) to 3.61 billion dollars in October, and continued to decrease to 2.03 billion dollars in January (~25th). plummeted
Exports to China were $9.17 billion, down 31.4% from the same period last year.
LG Ensol, whose foreign currency debt has surged in the United States, announced on the 1st that it would pay 870% bonuses to office technicians from last year's sales of 25.5986 trillion won and operating profit of 1.2137 trillion won.
Intel, which is the main memory semiconductor business like Samsung, announced a “severe cut in employee and executive salaries” a week after announcing lower-than-expected sales forecasts on the 31st due to a loss of market share to competitors and a slump in the PC market.
The pay cuts ranged from a 5% base pay cut for mid-level employees to a 10% cut for vice president-level employees, a 15% cut for the company's top executives other than the CEO, and a 25% cut for chief executive officer Pat Gelsinger, but the company of hourly manpower wages were not cut.
"The changes are designed to have a greater impact on management and will help support investments and the entire workforce," Intel spokesperson Addy Burr said in a statement. Profit margins are plummeting as the PC market cools.”
Intel lowered its matching program from 5% to 2.5% and suspended performance bonuses and quarterly performance bonuses.