Surge in AI Demand Fuels Record High for South Korea's Chip Exports in June

On July 1, South Korea's Ministry of Trade, Industry, and Energy announced record-high chip exports, fueled by a surge in global artificial intelligence (AI) demand, according to Yonhap News Agency. In June, exports rose by 5.1% year-on-year to $57 billion, marking the ninth consecutive month of growth. Imports, however, fell by 7.5% to $49 billion, resulting in a trade surplus of $8 billion. This trade surplus has now been sustained for 13 straight months.

Semiconductor exports, vital to South Korea's economy, soared by 50.9% to an unprecedented $13.4 billion, showcasing eight months of year-over-year growth. Other notable increases were seen in display exports (26.1%), computer exports (58.8%), and mobile device exports (3.9%). In contrast, automobile exports dipped slightly by 0.4% to $6.2 billion due to fewer working days.

In the first half of the year, South Korea's total exports climbed 9.1% year-on-year to $334.8 billion, while imports decreased by 6.5% to $311.7 billion. The trade surplus for this period reached $23.1 billion, the highest since $31.1 billion during the same timeframe in 2018.

Economists at IBK Securities predict continued export growth in the latter half of the year, driven by sustained global interest in AI technology, especially with the anticipated product launches from Apple. Joe Hayes, Chief Economist at S&P Global Market Intelligence, emphasized that global industrial activity and trade are recovering, positioning South Korea's manufacturing output and orders as leaders in exports due to the integration of critical intermediate products like batteries and semiconductors.

Additionally, SK Group revealed ambitious plans to invest 103 trillion won (approximately $74.8 billion) in its semiconductor division, SK Hynix, by 2028. Approximately 80% of this funding, or 82 trillion won, will focus on developing high-bandwidth memory (HBM) chips optimized for NVIDIA’s AI accelerators. Moreover, SK Telecom and SK Broadband will invest 34 trillion won in data center operations, marking their first large-scale investment announcement for 2028. Earlier this year, SK Hynix disclosed various initiatives, including a $3.87 billion advanced packaging facility and AI product research center in Indiana, USA, along with plans for a new memory chip complex in South Korea and ongoing investments in China's semiconductor sector.