Martial Arts Association, Domestic Economic Impact Report
Need for diversification to prepare for supply disruptions
Impact of Intel factory shutdown
▲ Page 6 As the armed conflict between Israel and the Palestinian armed faction Hamas intensifies, it has been pointed out that Korea must prepare for a supply chain crisis for items such as bromine and wireless direction finders for aircraft, which depend on imports of more than 90% from Israel.
The Korea International Trade Association revealed this in a report on the ‘Domestic Economic Impact of the Israel-Hamas Conflict’ on the 15th, and stated that if the operation of central processing unit (CPU) factories of high-tech companies and Intel in Israel is halted, there may be a delay in the recovery of the industry due to a slowdown in demand for semiconductors. It was predicted that there would be.
The report predicted that Israel’s share of Korea’s trade is around 0.3-0.4%, so this incident will not have a direct impact on trade. Of the 11,341 imported items from Korea as of August this year, a total of 8 items were more than 90% dependent on Israeli imports. However, with the exception of rifles (imports of $2.87 million from January to August), the import amounts for all are small and most can be replaced, so the report analyzed that the supply chain risk for these five items is actually low.
The report pointed out that bromine, a non-metallic element used in various industries such as flame retardants, oil and gas drilling, and water treatment, is 99.6% dependent on imports and is difficult to replace with other materials. The report advised that it is necessary to be prepared to switch import sources to the United States, Jordan, China, and Japan in preparation for supply disruptions. Wireless direction finders for aircraft (radar, GPS, etc. for drones) are also expected to have supply disruptions as the country is 94.8% dependent on imports from Israel (import amount: $360,000).
The report also expressed concern that the armed conflict between Israel and Hamas could have a negative impact on the semiconductor sector, Korea’s main industry. If the operations of high-tech companies, including Intel’s CPU plant in Israel, are halted, the recovery of the semiconductor industry may be delayed due to a slowdown in semiconductor demand.
Do Won-bin, a researcher at the Korea International Trade Association, said, “The war in Ukraine affected our economy by disrupting the supply chain of certain items such as neon and krypton,” and emphasized, “There is a need to identify and prepare in advance for problems that may arise if the Israeli conflict prolongs.” did.
Reporter Lee Je-hoon
2023-10-15 10:16:40
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