South Korea’s early exports jump again as AI boom fuels chip demand

[SEOUL] South Korea’s export growth remained robust in early June thanks to a continued boom in the semiconductor sector.

Exports adjusted for working-day differences rose 49.7 per cent from a year earlier in the first 20 days of this month, according to customs office data released on Monday (Jun 22). That compares with a 52.6 per cent increase in the same 20-day period of May.

On an unadjusted basis, shipments increased 60.4 per cent, while imports rose 23.2 per cent, leading to a trade surplus of US$17.5 billion.

The data suggest external demand remains robust, supported by booming investment tied to artificial intelligence and data centres. They also add to evidence that semiconductors remain the primary driver of South Korea’s growth, helping offset weakness in other parts of the economy.

Chip exports again led gains, rising 188.4 per cent from a year earlier. Shipments of computer-related products increased 293.3 per cent, while petroleum-product exports were supported by elevated energy prices.

Policymakers are assessing the implications of a prolonged semiconductor boom that has underpinned economic growth, boosted tax revenue and supported asset prices.

The Bank of Korea (BOK) has turned more hawkish in recent months, citing inflation risks stemming from higher oil prices, a weaker won and resilient economic activity.

Governor Shin Hyun Song has argued that the benefits of the chip expansion are increasingly filtering through the economy via stronger corporate earnings, consumption and investment.

Speaking at a briefing last week, Shin said that the semiconductor boom could complicate the inflation outlook, as record bonus payouts by major technology companies may spill over into broader wage growth and consumer spending. Consumer-price inflation accelerated to 3.1 per cent in May, the fastest pace in more than two years, reinforcing the BOK’s tightening bias.

SEE ALSO

South Korea inspects major FX banks for destabilising won trades

South Korea unveils measures to stem won slide, curb speculation

South Korean stocks slide as cracks emerge in world-beating rally

South Korea overtakes India as world’s sixth-largest stock market

South Korea’s inflation accelerates, supporting the central bank’s hawkish tilt

More

By destination, exports to China rose almost 87 per cent, while shipments to the US increased nearly 54 per cent. Exports to Taiwan and Vietnam climbed 103.6 per cent and 75.5 per cent, respectively, reflecting broad-based strength in semiconductors, displays and petroleum products. BLOOMBERG