1. As the semiconductor industry sustains an unprecedented boom, expectations for its broader economic spillover effects are also rising. Indeed, Gross Domestic Income (GDI) has recorded high double-digit growth, driven by improved terms of trade amid a sharp rise in semiconductor export prices, and domestic semiconductor firms have been expanding wages and investment on the back of higher operating profits. For the Korean economy to sustain robust growth momentum going forward, this growth in the IT sector needs to spread broadly through the domestic economy, and assessing this spread requires examining whether rising income is translating into higher spending—the consumption channel. Accordingly, this paper uses regional microdata to analyze the consumption spillover effect*, focusing on regions directly benefiting from the semiconductor boom, such as Icheon, Hwaseong, and Cheongju.
*The estimates in this paper reflect only the consumption spillover effects of bonus payments from the two major semiconductor firms, Samsung Electronics and SK Hynix, and do not include effects from wage increases at other IT firms, wealth effects, or effects operating through increased government tax revenue.
2. The results show that, following the start of bonus payments (from January 2025), monthly consumption in "high semiconductor-exposure regions" (Icheon, Hwaseong, Cheongju)—areas with a high share of semiconductor employees among the adult population—is up to about 4% higher than in other regions, driven mainly by high-value discretionary spending such as automobiles, home appliances/furniture, and department stores. This suggests that the semiconductor boom is already having a meaningful positive effect on domestic consumption.
Converting the consumption effect in the semiconductor-benefiting regions into monetary terms, the cumulative increase in consumption from last year through the end of this year is expected to reach approximately KRW 1.7 trillion, with the average annual increase for 2025–2026 (KRW 0.8 trillion) equivalent to about 2% of last year's growth in private consumption. In addition, the consumption spillover ratio—measured as the increase in consumption relative to after-tax bonus payments—is estimated at 27% in 2025 and 21% in 2026.
Compared to a counterfactual scenario without the semiconductor boom, this increase in consumption is estimated to raise GDP by 0.01% in 2025 and 0.03% in 2026. In particular, given that bonus payments are set to expand sharply in 2027 (by about five times the 2026 level), the GDP-boosting effect is projected to widen to 0.08–0.12% (adding 0.06–0.09 p.p. to 2027 growth rate).
3. What matters more for future growth is whether the rise in consumption observed in semiconductor-benefiting regions can be sustained and broaden further. The consumption spillover effect could strengthen further if: ➊the benefits of the boom extend beyond wage increases (the intensive margin) to job creation (the extensive margin); ➋rising income flows into consumption rather than into asset markets; and ➌the increase in consumption spreads across a wider range of items.
➊ As growing demand for semiconductors driven by the global spread of AI brings forward capacity expansion by domestic firms, employment may increase in tandem going forward, potentially strengthening the consumption spillover effect. During the semiconductor boom of the 2010s as well, improved corporate performance initially translated into worker compensation, but the contribution from employment gradually increased alongside large-scale capacity expansion later in the cycle.
➋ If rising income flows into consumption rather than into asset markets, the spillover effect could widen. Despite a similar bonus shock (from SK Hynix), Cheongju's consumption response was larger than Icheon's, which appears to reflect a relatively higher share of the increased income flowing into consumption rather than the housing market.
➌ If consumption gradually spreads with a lag beyond high-value discretionary goods into services and other categories going forward, the 「consumption → income → consumption」 virtuous cycle is likely to strengthen further, allowing the benefits of the semiconductor boom to reach a broader range of households. During the manufacturing boom of the 2010s (automobiles and chemicals, Ulsan) as well, consumption spread with a lag into services and other categories following wage increases.
4. Accordingly, policy efforts along the following lines are needed to help the benefits of the semiconductor boom spread across the broader economy. First, the domestic industrial ecosystem spanning materials, parts, and equipment should be strengthened to enhance inter-industry linkages, so that gains in the semiconductor sector can translate into expanded employment and production in other industries. In addition, conditions should be fostered that allow increased income to flow smoothly into consumption and the real economy rather than flowing excessively into real estate. Support for vulnerable sectors—such as SMEs and low-income households—should also be provided in parallel, to help consumption spread into sectors with high value-added and employment-inducement effects, such as services.