South Korea’s customs office reported on 24 March that exports of teleconferencing hardware and related components leapt 10 percent in the first three weeks of March as companies in Europe, North America and parts of Asia told staff to stay home to slow COVID-19. Shipments of semiconductors, the country’s top export item, rose 20.3 percent from a year earlier after a 15.4 percent gain in February, cushioning the wider trade shock triggered by the pandemic.
Seoul’s chip giants ride the cloud boom
Samsung Electronics and SK hynix both shipped more server-grade memory in March than in any month since last summer, customs data show. Cloud operators such as Amazon Web Services, Microsoft Azure and China’s Alibaba Cloud have been racing to add capacity after lockdowns pushed office workers, university classes and even government meetings online.
“Demand from cloud-computing firms has boosted sales of server chips, while an increase in telecommuting in the United States and China has also been a main driver of huge server demand,” a trade ministry official in Sejong told reporters on condition of anonymity because he was not authorised to speak on the record.
The ministry’s own figures put South Korea’s average daily chip export value at $434 million in the 20 days to 20 March, up from $360 million a year earlier. Reports note that prices for 8-gigabit DDR4 memory, a proxy for the sector, have climbed 12 percent since late February after sliding for almost a year.
Webcam and headset orders flood Incheon
Beyond chips, pallets of webcams, noise-cancelling headsets and HDMI dongles are leaving Incheon International Airport on cargo flights that would normally carry much of the country’s cut flowers or cosmetics. Korean Air said cargo tonnage to North America rose 8 percent year-on-year in the first half of March even as passenger traffic collapsed 85 percent.
“Every logistics manager in Korea is suddenly an expert in air-freight priority lists,” said Park Sung-soon, an analyst at Cape Investment & Securities in Seoul. “Data centres should prepare bigger pipes to carry the traffic with the increase in demand as more people work and study from home due to the implemented lockdowns and quarantines.”
Small and mid-sized manufacturers that normally supply Samsung and LG with smartphone parts have pivoted to USB cameras and microphone modules, filling gaps left by Chinese suppliers that were idled in February when Beijing locked down Hubei province.
Tokyo and Canberra see same surge
Japan’s Dynabook and NEC Corp both told distributors on 20 March to expect laptop shortages through May. Dynabook, formerly Toshiba Client Solutions, said inbound orders from corporate buyers doubled in the week that Tokyo asked firms to adopt remote work. NEC has diverted output of embedded speakers from its domestic plants to China to keep up.
Across the Tasman, Australia’s largest home-entertainment retailer JB Hi-Fi Ltd said same-store sales of notebooks and routers rose more than 25 percent in the second half of March. Commercial customers now account for 40 percent of laptop volume, up from 15 percent before the crisis, the company told the Australian Securities Exchange.
The regional pattern is clear: governments that acted early to encourage telework created sudden demand for hardware, and East Asian exporters with open factories are filling it. China’s own exports of laptops and webcams rebounded in March after February’s slump, but Seoul’s shipments are growing faster, partly because Korean plants never faced the draconian quarantines imposed in Shenzhen and Suzhou.
Won strength and oil crash provide extra lift
A stronger won and cheaper oil are amplifying the bounce. Korea’s currency has gained 4 percent against the dollar since mid-March as greenback liquidity stress eased, trimming import bills for components such as camera sensors and display panels. Brent crude’s fall below $30 a barrel has knocked roughly $1.2 billion off the country’s monthly energy import tab, according to Korea National Oil Corp estimates.
That cost relief matters because Korean exporters quote most contracts in dollars while paying domestic wages and utilities in won. The twin tailwind helps explain why the Korea Customs Service still expects overall March exports to fall only 0.2 percent year-on-year when many economists had pencilled in a drop of more than 10 percent at the start of the month.
Yet officials warn the lift could be fleeting. “If global layoffs deepen, corporate IT budgets will be slashed and the current surge in replacement demand will fade,” the trade ministry official said. Samsung has already told investors to expect “muted” smartphone sales in the second quarter, and memory prices are notoriously volatile.
Still, for now Korean factories are humming, cargo jets are full and container terminals that sat half-empty in January are loading electronics bound for home offices from California to Catalonia. The pandemic that shuttered much of China’s economy in February has handed Seoul’s tech sector a short-term windfall, one that policymakers hope will buy time until broader consumer demand recovers.
