South Korea reached a record-high monthly trade deficit of $12.69 billion in January, mainly due to weakening global demand for semiconductors, according to data compiled by the Ministry of Trade, Industry and Energy on Wednesday.

While outbound shipments fell 16.6 percent on-year to $46.27 billion in January -- the largest drop in three years -- imports slipped 2.6 percent on-year to $58.96 billion.

This figure broke the previous record high of $9.43 billion in August last year. It is also the first time that the country saw a trade deficit for 11 consecutive months since 1997.

“Seasonal causes such as an increase in energy imports during the winter played a major role in January’s monthly trade deficit, while other factors such as a sharp decline in semiconductor export prices and disruptions in Chinese economic activities due to COVID-19 further deteriorated the trade balance,” Finance Minister Choo Kyung-ho said during a meeting held in Seoul with ministry officials working at overseas embassies on Wednesday.

In January, exports of semiconductors, the country's key export item, recorded $6 billion, down 44.5 percent on-year.

This was due to weakening prices and demand for memory chips in the global market.

The industry was especially hit hard by the price fall of memory products like DRAM and NAND flash, which take up 57.1 percent of South Korea's semiconductor exports.

Adding to that, exports of system semiconductors, which had been showing an upward trend in exports, decreased by 25 percent in January.

Korea’s semiconductor exports are highly dependent on the Chinese market, which accounted for 40.3 percent of the country’s total semiconductor exports last year. Sluggish exports to China are also often a sign of the semiconductor industry’s poor performance overall.

Monthly semiconductor exports to China stayed around $4 billion for 16 consecutive months until September last year, but in October the figure dropped dramatically to $3.61 billion and has not bounced back since, recording $3.24 billion in November and $3.23 billion in December.

Moreover, two of South Korea's leading semiconductor makers -- Samsung Electronics and SK hynix -- saw earnings shocks in the fourth quarter of last year.

SK hynix on Wednesday announced that it logged an operating loss of 1.7 trillion won ($1.38 billion) during the fourth quarter of last year. It was SK hynix’s first quarterly operating loss since the third quarter of 2012.

Before that, Samsung Electronics announced that its operating profit in the fourth quarter last year was 4.3 trillion won, down 68.9 percent on-year.

This drop was due to its semiconductor division, which saw its operating profit decrease to 270 billion won, a nearly 97 percent drop from the previous year.

Meanwhile, President Yoon Suk Yeol on Wednesday afternoon visited semiconductor chip wafer supplier SK Siltron's plant in Gumi, North Gyeongsang Province to show his support for SK Siltron’s plan to spend 1.23 trillion won between 2024 to 2026 period on establishing a new wafer production facility in Gumi.

“We need to preemptively respond to falling memory chip prices and weakening demand induced by the economic slowdown,” Yoon said during his visit.

“Our competitors are threatening our semiconductor industry by using all means such as applying import regulations, providing subsidies and tax benefits. Korean government and corporations must work together to overcome this (threat), and we will," he added.