<Anchor>

Friendly Economy Today (12th) is also a reporter from Kwon Ae-ri. Kwon, looking at it here, it looks like we have two items ready for today. It seems to be a comparison between the first quarter of last year and the first quarter of this year, and the status of these two items seems to have changed a bit. What are these items?

<Reporter>

Yes. The first item, which earned a whopping 45 trillion won with our money in the first three months of last year, has plummeted by 40% this year.

The second item, which accounted for less than one-third of the first item last year, has become a bit staggered this year.

The two main items of our exports are semiconductors and automobiles.

Semiconductors had their best performance ever in March last year, while automobiles had their best performance in March this year. It's starkly staggered.

Add to that the export of auto parts, and we see that automobile-related exports are outpacing semiconductors. This is the first time since 2017 that semiconductors have reversed in automobiles.

While auto exports remained almost flat or even declining until 2020, semiconductors have widened the gap.

The import and export status for the last ten days in April was announced yesterday by the Customs Administration. This trend continues.

Despite the global economic slowdown, our automobile exports are doing a record boom and semiconductors are showing record sluggishness, and automobile-related exports continue to outpace semiconductors.

Automobiles began to show notable export growth from 2021.

In particular, relatively expensive cars such as electric vehicles and SUVs, as well as domestic cars with high added value, began to sell well overseas.

<Anchor>

It's fortunate that automobiles fill the void in semiconductors, but semiconductors have been a very large part of our exports. There is also an analysis that a large part of the current export sluggishness is due to semiconductors, so how should we view this?

<Reporter>

Yes. But the government believes that this is the bottom. From the third quarter onwards, we expect the semiconductor economy to improve as demand outweighs supply.

When we say semiconductor economy, we usually refer to the memory semiconductor economy, which is the main focus of the global market for our semiconductor companies.

Memory semiconductors are a fundamental component in the making of computers, mobile phones, and servers. Compared to the stock that is stacked now, there is not much to find, so the price has dropped a lot.

Semiconductors are a bit like petroleum. Some oil-hungry countries in the Middle East come together when oil prices drop a bit and raise prices again by reducing their production.

There are also few companies in the world that produce memory semiconductors properly.

So, when semiconductor demand is sluggish and prices fall, a handful of manufacturers can reduce production to reduce inventories and control prices.

Until last week, all major memory semiconductor manufacturers in the world, except Samsung Electronics, had responded to the current situation by cutting production.

But now, even Samsung Electronics has officially announced production cuts.

Sales are also sales, but operating profit in the first quarter was 96% lower than last year, changing the stance of "no production cuts" even if it was difficult.

Now, since Samsung Electronics, the most influential company in memory semiconductors, has begun to cut production, the government and the market are both expecting that demand will outweigh supply and semiconductor prices will rise from the third quarter.

As you
mentioned >
anchor <, Samsung Electronics has now officially announced that it will join the production cuts, so why haven't you joined the production cuts so far?

<Reporter>
In fact,
this is the first time since the foreign exchange crisis that Samsung Electronics has officially acknowledged that it is cutting semiconductor production.

In fact, the memory semiconductor market is said to play what is called a "game of chicken."

When the strong are forced to cut production, they hold on, they continue to push away their competitors, and when the cycle of slump ends, the company that holds on is stronger, and this is a market.

Samsung Electronics said it will continue to invest apart from production cuts.

The fact that Samsung Electronics, the No. 1 company in the industry, can't hold up and has to announce production cuts for the first time in 25 years is proof that the semiconductor industry is not good these days.

Therefore, the expectation that the semiconductor market will recover little by little from the third quarter is generally common, but what about the speed of the recovery?

It is important for us to revive the semiconductor economy now, but in the long run, it is desirable for our semiconductor companies to develop more stamina to withstand the economic downturn.