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South Korea's Exports Soar to Record High on Chip Boom, AI Demand
- •South Korea's monthly exports reached a record $120.9 billion in September, driven by global demand for artificial intelligence and semiconductors.
- •Exports adjusted for working-day differences climbed 104.9% year-on-year, with semiconductor exports surging 263% to $60.3 billion.
- •The strong export performance supports the Bank of Korea's view that the economy can withstand higher interest rates, strengthening the case for further monetary tightening.
- •The BOK upgraded its 2026 growth forecast to 3.3% and may implement further rate hikes, with JPMorgan Chase & Co. predicting the benchmark could reach 3.75%.
- •The chip boom is also boosting government revenue, with national tax revenue expected to reach a record 478.6 trillion won ($353 billion) this year.
Key Questions Answered
South Korea's exports extended their breakneck growth in September as global demand for artificial intelligence continued to power semiconductor shipments, pushing total exports to a record $120.9 billion. Semiconductors drove the boom with a 263% surge to $60.3 billion, while computer shipments jumped 435%.
The strong trade momentum supported the Bank of Korea's view that the economy can weather higher borrowing costs, prompting a quarter-percentage-point rate hike to 3% in August. The BOK's growth forecast for 2026 was also upgraded to 3.3% due to robust exports and investment driven by the global AI build-out.
By destination, South Korea's exports saw massive gains across major markets, with shipments to the United States jumping 137% and exports to China increasing 123%. Additionally, shipments to India and the European Union grew by 50% and 21%, respectively.
