Taiwan’s trade deficit with South Korea widened to a record $18.1 billion in the first 10 months of 2024, driven by increased imports of memory chips for AI applications. The gap surpassed the full-year deficit with Japan, making South Korea Taiwan’s largest source of trade imbalance, according to Taiwan’s Ministry of Finance.
Semiconductor imports, primarily DRAM chips used in AI applications, accounted for 71.3% of the deficit. SK Hynix, South Korea’s second-largest memory chip maker, supplies components to Taiwan Semiconductor Manufacturing Co. for integration into Nvidia’s AI processors.
The shift highlights the deepening interdependence of Asian chip suppliers in the AI supply chain. Taiwan’s imports from South Korea jumped 50% to $34.9 billion, while exports rose 11% to $16.8 billion.
Beyond semiconductors, Taiwan’s deficit with South Korea was driven by diesel fuel imports and computer components. The gap also widened due to increased purchases of steel structures for offshore wind farms, reflecting Taiwan’s push into renewable energy.
The data underscores South Korea’s growing influence in Taiwan’s technology supply chain, particularly in memory chips where Korean manufacturers maintain a competitive edge.
