Media365
South Korea’s exports surged at their fastest annual pace in nearly 48 years in June, driven by booming global demand for semiconductors and AI-related technology, underscoring the country’s central role in the artificial intelligence supply chain.
Preliminary trade data released on Wednesday showed exports from Asia’s fourth-largest economy jumped 70.9 per cent year-on-year to a record $102.25 billion in June, accelerating from a revised 53.4 per cent increase in May. The growth marked the strongest annual expansion since October 1978 and comfortably exceeded economists’ expectations of a 61.0 per cent rise.
The milestone also made South Korea only the fourth country in the world to record monthly exports exceeding $100 billion, joining Germany, China and the United States.
AI boom drives semiconductor exports
The sharp rise was fuelled by an extraordinary rebound in semiconductor shipments, which soared 199.5 per cent from a year earlier to $44.8 billion as technology companies worldwide continued investing heavily in AI infrastructure and data centres.
Exports of computer-related products climbed an even steeper 308.8 per cent, reflecting sustained demand for servers and AI hardware. Steel exports rose 9.6 per cent after declining for 13 consecutive months, supported by data centre construction, while petroleum product exports increased 49.8 per cent amid elevated global oil prices.
The latest figures reinforce South Korea’s position as a key beneficiary of the global AI investment cycle, with memory chip giants such as Samsung Electronics and SK Hynix seeing robust demand for high-bandwidth memory and advanced semiconductor products used in AI applications.
Shipments to China and US surge
By destination, exports to China rose 92.1 per cent from a year earlier, while shipments to the United States increased 78.6 per cent. Exports to the European Union climbed 31.8 per cent.
However, exports to West Asia declined 8.4 per cent, reflecting weaker demand from the region.
Imports also grew faster than expected, rising 30.1 per cent year-on-year to $66.10 billion after increasing 20.7 per cent in May. The increase exceeded economists’ forecast of 26.3 per cent and marked the fastest import growth since May 2022.
The combination of robust exports and rising imports resulted in a record monthly trade surplus of $36.15 billion.
Export strength supports economic outlook
The strong trade performance suggests South Korea’s export-led recovery remains firmly intact despite broader concerns about slowing global manufacturing and geopolitical uncertainties.
The data also strengthen expectations that the Bank of Korea could begin raising interest rates later this month. Policymakers have increasingly pointed to stronger economic growth, persistent inflation, a weaker won and rising housing prices as reasons to tighten monetary policy.
Bank of Korea Governor Shin Hyun Song has previously said the semiconductor boom is spilling over into consumption, investment and wage growth, increasing the risk that inflationary pressures could become more entrenched.
The export figures come shortly after the South Korean government unveiled an ambitious semiconductor strategy aimed at cementing the country’s leadership in AI chips. The administration plans to mobilise at least 1,350 trillion won (about $880 billion) in investment from Samsung Electronics, SK Hynix and other companies to expand chip manufacturing and AI data centre capacity over the next five years.
Manufacturing growth slows despite export boom
Separate data released on Wednesday showed South Korea’s manufacturing sector continued expanding in June, although momentum moderated.
The S&P Global Purchasing Managers’ Index (PMI) eased to 52.1 in June from 54.8 in May, which had been the highest reading in more than five years. A reading above 50 indicates expansion.
Output and new orders continued to grow but at a slower pace, while new export orders declined for a second consecutive month due to the lingering effects of conflict in West Asia on global trade.
S&P Global Market Intelligence economist Usamah Bhatti said manufacturers continued to face higher raw material costs and supply chain disruptions caused by delays and shortages of key inputs.
Business confidence for the year ahead weakened to its lowest level since November 2025 as firms expressed concerns over domestic economic conditions and the prospect of persistently high input costs.
Despite the moderation in factory activity, the strength of semiconductor exports suggests AI-related demand remains a powerful driver of South Korea’s economy and is likely to continue supporting growth in the coming months.
