---
source: The Chosun Daily
url: https://www.chosun.com/english/market-money-en/2026/03/31/NAJQWDHBWRCJLANKPAA7YTE7SU/
document_type: html
date_retrieved: 2026-03-31
period: February 2026
parent_publication: Industrial Activity Trends
indicators_covered: [Industrial Production YoY, Industrial Production MoM, Semiconductor Production, Equipment Investment, Construction Performance]
---

# Semiconductor Surge Drives 2.5% Jump in South Korea's Industrial Production

February data shows semiconductor output up 28.2%, but auto production down 19.3% amid pre-Middle East war economic conditions.

Last month, semiconductor production surged by over 28% for the first time in a month, and equipment investment and construction performance rebounded by double digits, among other signs of improvement in key economic indicators.

However, consumption remained stagnant, and automobile production decreased by nearly 20% compared to the same period last year, indicating that the warmth of recovery was not evenly distributed.

Additionally, since these statistics were recorded before the outbreak of the Middle East war, there are evaluations that they are significantly disconnected from the current situation of the South Korean economy, which is struggling with high oil prices, high exchange rates, and high inflation.

According to the *February 2026 Industrial Activity Trends* released by the Ministry of Data and Statistics on the 31st, total industrial production last month increased by 2.5% compared to the previous month. The industrial production growth rate marked the largest increase in 5 years and 8 months since June 2020 (2.9%) when the COVID-19 outbreak occurred.

The coincident index of cyclical fluctuations, which reflects the current economic situation, rose by 0.8 percentage points to 99.8.

### Semiconductors Drive Production, Automobiles Struggle

The increase in total industrial production was led by the mining and manufacturing industry (5.4%). Production of memory semiconductors, such as DRAM and flash memory, surged by 28.2% compared to the previous month, driving growth in the mining and manufacturing sector. Compared to the same month of the previous year, semiconductor production also increased by 27.1%.

In contrast, electronic components decreased by 7.0% compared to the previous month, and automobile production fell by 19.3% compared to the same month of the previous year. Overall, the mining and manufacturing industry contracted by 2.2% compared to the same month of the previous year, indicating that sluggishness in key sectors other than semiconductors is hindering growth. The average operating rate in manufacturing rose by 3.6 percentage points to 74.4% compared to the previous month.

Service industry production increased by 0.5% compared to the previous month. While wholesale and retail (2.7%) and professional, scientific, and technical services (3.3%) led the growth, the information and communication sector decreased by 5.7%, dampening the overall increase.

### Consumption Stagnant, Investment Rebounds Significantly

Retail sales remained flat (0.0%) compared to the previous month, as semi-durable goods such as apparel decreased by 5.4% and durable goods like communication devices and computers fell by 1.5%, but non-durable goods including food and pharmaceuticals increased by 2.6%. Compared to the same month of the previous year, sales increased by 4.7%.

Investment rebounded. Equipment investment increased by 13.5% compared to the previous month, driven by growth in transportation equipment such as automobiles (40.4%) and machinery such as electrical equipment (3.8%).

Construction performance (actual construction results) also turned to an increase, rising by 19.5% compared to the previous month, with both building construction (17.1%) and civil engineering (25.7%) showing growth. However, construction orders remained modest, with a year-on-year increase of only 6.7% as the civil engineering sector contracted by 38.0%.

### Coincident Index Nears 100…Impact of War Not Reflected

The coincident index of cyclical fluctuations (99.8) approached 100. This index indicates a favorable economic condition when above 100 and a sluggish condition when below 100. The leading index of cyclical fluctuations, which forecasts future economic conditions, also rose by 0.6 percentage points to 102.8 compared to the previous month.

However, these statistics were recorded before the U.S.-Israel attack on Iran on the 28th of last month, which marked the full-scale outbreak of the Middle East war. How real economic indicators will respond in March, when surging oil prices, exchange rates, and inflationary pressures have become apparent, is expected to be a key gauge of the actual economic trend.