South Korean Exports Soar on AI Chip Boom

South Korean exports experienced significant growth in July, largely propelled by a surge in demand for AI chips. While the growth rate of 59.0% was a decrease from June's 70.7%—the highest since 1978—it still represented the second-strongest annual increase in the current growth period. This sustained export performance is predominantly driven by chip giants such as Samsung Electronics and SK Hynix, benefiting from increased global investment in artificial intelligence. Analysts note that rising semiconductor prices are a key factor, with shipment volume increases being more modest.

In the first 20 days of July, exports climbed by 52.3% year-on-year, with semiconductor shipments alone jumping 180.6%. Economists suggest that the ongoing semiconductor boom is the underlying strength, with slower overall growth partly due to fewer working days last July. Despite concerns from a sharp selloff in South Korean equities, driven by AI-related worries and SK Hynix's earnings report, Samsung Electronics anticipates continued strong AI chip demand and supply constraints throughout the year. The trade surplus for July was forecast at $29.59 billion.