South Korea’s producer prices rose for the second consecutive month in October, driven largely by strong global demand for memory chips, according to data released Thursday by the Bank of Korea.
The Producer Price Index (PPI) increased 0.2% month over month to 120.82 (2020=100), following a 0.4% rise in September.
Prices of agricultural and fisheries products fell 4.2% from the previous month, led by sharp declines in vegetables and livestock items such as spinach (-47.5%), napa cabbage (-26.1%), and pork (-14.2%), but higher prices for manufactured goods offset the drop.
Factory output prices climbed 0.5%, supported by a 3.9% increase in computer, electronic and optical products and a 1.3% gain in primary metal products. Memory chips posted some of the steepest gains, with DRAM prices surging 28.1% and flash memory jumping 41.2%, while squid (+18.5%), gold (+13.3%), and hotel services (+10.7%) also recorded notable increases. Service-sector prices rose 0.5%, driven by financial and insurance services (+2.9%) and hospitality services (+0.5%).
The Bank of Korea’s Lee Moon-hee, head of price statistics, said the strong rebound in demand for memory semiconductors, including DRAM and flash memory, continues to push up chip prices.
South Korea’s domestic supply price index — which includes import prices — rose 0.9%, marking the biggest gain since April 2023, with all major components increasing: raw materials by 1.5%, intermediate goods by 1.0%, and final goods by 0.3%.
The total output price index, which includes export shipment prices, climbed 1.1%, also the largest rise since April 2023. Lee added that the increases in both supply and output prices were influenced not only by stronger semiconductor demand but also by higher import and export prices driven by a weaker Korean won.
