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Korean Business Sentiment Improves as Semiconductor Industry Rebounds

Korean business sentiment is showing modest signs of recovery thanks to a flourishing semiconductor sector, though overall confidence remains subdued compared to pre-emergency levels. The latest Bank of Korea survey reveals a cautiously optimistic outlook amid ongoing global trade tensions and targeted tariffs that continue to weigh on export-dependent industries.

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Business Sentiment Index Shows Marginal Gains

The Corporate Business Sentiment Index (CBSI) has increased slightly, with semiconductor pricing and exports driving the improvement.

April’s CBSI reached 87.9, up 1.2 points from the previous month
Any reading below 100 indicates pessimistic sentiment still prevails in the business community
The index has remained in the 80s for five consecutive months since dropping from 91.8 in November to 87.3 in December last year

Manufacturing Leads the Recovery

The manufacturing sector is showing more robust signs of improvement compared to non-manufacturing industries.

Manufacturing CBSI rose to 93.1, with increases in product inventory (+1.1p) and new orders (+0.6p)
Non-manufacturing CBSI reached 84.5, with improvements in profitability (+1.0p) and business conditions (+0.4p)
Electronics, visual equipment, telecommunications, metal processing, and non-metallic mineral industries showed particularly strong performance

Semiconductor Industry: The Economic Bright Spot

Rising semiconductor prices and export volumes are providing critical support to Korea’s economic outlook.

The semiconductor sector has experienced significant price increases, boosting profitability
Export volumes for semiconductor products have risen substantially
This performance stands in stark contrast to struggling sectors facing global headwinds

U.S. Tariff Policies Cast a Shadow

Despite semiconductor optimism, newly implemented U.S. tariffs are creating substantial headwinds for certain export sectors.

The automotive industry is facing deteriorating conditions following the implementation of targeted U.S. tariffs
Export-oriented businesses express concern about potential recession risks stemming from aggressive U.S. trade policies
Business forecasts remain cautious as companies assess the long-term impact of evolving trade tensions

Korea’s economic landscape presents a mixed picture, with semiconductor strength providing a counterbalance to broader trade concerns. The question remains: can the semiconductor industry’s momentum extend to other sectors, or will targeted tariffs and global economic uncertainty continue to dampen overall business confidence?