South Korea's semiconductor recovery has driven a sharp rise in exports and output, but its power to create jobs has weakened further. The sector's employment-inducement coefficient fell last year, and its ripple effect on hiring was only about one-fifth of the average across all industries. As artificial intelligence drives a structural expansion in chip demand, debate is intensifying over whether the boom delivers any trickle-down benefit to the wider economy.
An analysis of the 2024 input-output tables released by the Bank of Korea on the 21st showed the semiconductor sector's employment-inducement coefficient fell to 1.54 in 2024 from 2.36 in 2023. The coefficient measures how many jobs are created directly and indirectly — in the industry itself and in related sectors such as raw materials, components and services — for every 1 billion won ($720,000) in final demand. The gap with other industries also widened. The average for all industries stood at 7.8 in 2024 and manufactured goods at 4.7, five times and three times the chip figure, respectively.
According to the central bank, full-time equivalent employment in semiconductors rose 1.4% to 86,590 in 2024 from 85,405 in 2023, while the number of wage workers increased 1.7%. The value-added ratio, by contrast, jumped 11.8 percentage points to 50.3% from 38.5%. Value creation expanded far faster than employment, indicating that the chip upturn that began in 2024 has translated into relatively little job growth.
The same concern surfaced at the Bank of Korea's Monetary Policy Board. At the May meeting on the direction of monetary policy, members raised the view that the semiconductor industry generates limited employment and that if the gains are concentrated in a handful of companies, the spillover to other industries could also be constrained.
Separately, Korea Customs Service data showed semiconductor exports totaled $34.13 billion in the first 20 days of September, up 259.4% from a year earlier. Chips accounted for 47.8% of total exports, the highest share on record for the same period.
