U.S. reprisals may delay chip recovery to 2003, Korea says
SEOUL (Reuters) - A lengthy military campaign by the U.S. in retaliation for the air attacks would delay a recovery in the struggling chip industry until 2003, South Korea's Commerce Ministry said on Sunday.
A short-lived campaign confined to Afghanistan would allow the industry to recover after the fourth quarter of 2001 when the cycle of falling chip prices had been expected to bottom.
The ministry said that under a scenario where the U.S. is involved in a lengthy campaign freighter operations would be halted chopping off semiconductor shipments, the key export items of South Korea, to the United States and Europe.
``Because of raw material shortages, it will be inevitable to stop some (chip) production if the war spreads to other regions and gets longer,'' it said in a statement.
The ministry also said customs procedures would be tighter, causing delays for computer exports. There would be restrictions on air freight and consumer demand would become languid.
Electronic products, including chips, make up 84.2 percent of Korean shipments to the United States, about 22 percent of Korea's total exports.
Most industries would also be vulnerable if there was a lengthy U.S. military campaign. Oil prices would rise, U.S. demand would fall, although there would be minimal impact if U.S. action was short lived.
In contrast, the steel industry would benefit or see limited impact, supported by reconstruction needs, the ministry said.
A Reuters poll of leading Wall Street firms said on Friday the U.S. economy was now in recession and growth would not resume until the first half of 2002. |
