To South Korea now, its economy is facing growing headwinds, with its core industries hit by the weakening Korean won against the greenback. This particularly bodes ill for the semiconductor industry. Our correspondent Sumin Yoo has more. 

The Korean won, slid around 17 percent against the US dollar amid the Federal Reserve's aggressive monetary tightening, the local currency even hit the 1,440 won mark in September, the lowest level seen in more than 13 years since the financial crisis. Traditionally, South Korea's semiconductor industry, the nation's mainstay export category has been considered one of the beneficiaries of the high exchange rate, as weaker won provides price competitiveness and better profitability as sales are settled in US dollars. But recently, this is not the case – as the fiercely strong dollar is sagging chip demand.

MINHEE LEE, Senior Analyst, BNK Securities "Especially when it comes to emerging countries – in case of a weaker local currency, the consumer economy gets worse and the purchasing power gets worse. Sales of Korean mobile phones, TVs and PCs are made through local subsidiaries. That means sales revenues are created in local currencies, while raw material payments are settled in dollars."

Overseas sales of semiconductors in South Korea decreased on-year for the first time since April 2020. Some say the semiconductor upcycle, has entered into the "downcycle" – as illustrated by Increased inventory and cheaper price. According to the industry analyst Lee, if the current situation persists, global chipmakers would have to suffer a drastic drop in sales revenue in Q3.

MINHEE LEE, Senior Analyst, BNK Securities "Samsung Electronics' and SK Hynix's Q3 earnings report will come out soon, and their sales are set to plummet in the second half of the year. The reason is as price and demand decrease, sales drop, leading to shrinking profitability."

SUMIN YOO, Seoul "Other chipmakers like Micron tech, and Kioxia Corp announced plans to scale back spending on new chipmaking, or cut down its output due to falling demand. Samsung Electronics SK Hynix is poised to take a similar path scaling down the facility investment and cutting back on their production levels. At times like this, the traditional rule that a weak won leads to robust earnings, does not appear to be the case. Yoo Sumin, CGTN, Seoul."