SK Hynix Inc. 12-layer HBM4E reminiscence chips on a LPDDR5X CAMM2 reminiscence module organized on the firm’s workplace in Seongnam, South Korea, on Friday, July 24, 2026. SK Hynix and Samsung Electronics Co. are set to check investor urge for food for reminiscence chips as South Korea’s inventory market now a bellwether for international AI sentiment grapples with violent swings pushed by leveraged chip bets. Photographer: SeongJoon Cho/Bloomberg through Getty Photographs
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South Korea’s semiconductor exports have been an absolute boon for Asia’s fourth-largest economic system, sending total numbers to a document. However the frenetic tempo itself is inflicting concern about what’s subsequent.
Semiconductor exports surged 209% from a yr earlier to a document $46.65 billion in August, accounting for 47.5% of the nation’s $98.25 billion in items exports that month, the Ministry of Commerce, Business and Assets reported earlier this week.
That was primarily as a result of AI infrastructure demand as giant cloud suppliers together with Google and Amazon expanded capital spending, it stated.
“In my estimate, semiconductor exports accounted for almost 80% of export development in August,” Jeff Ng, head of Asia macro technique at Sumitomo Mitsui Banking Company, instructed CNBC. “General export development was pushed by chips, computer systems, and better petroleum product costs.”
Progress in such figures is usually seen as a constructive. However the extraordinarily fast tempo right here additionally raises concern about what occurs if, or when, the growth begins to dissipate.
“A gradual slowdown could be manageable. An abrupt stall is a unique matter, as a result of the economic system already runs at two speeds, and the sectors that would want to take up the slack are those underneath strain as we speak,” in line with Dave Chia, an economist at Moody’s Analytics.
Financial coverage might additionally restrict the cushion if the cycle turns quickly. The Financial institution of Korea raised its base fee to three% in August, its second consecutive hike, as core inflation remained elevated.
Chia warned that if chip demand cools whereas coverage remains to be tightening, “the windfall fades when home demand is not robust sufficient to take over.”
And different, extra conventional, sectors are struggling. Vehicle exports fell 29.8% from a yr earlier in August, though the commerce ministry attributed a lot of the decline to summer-holiday timing and partial strikes. Chia additionally stated components like U.S. tariffs and a shift towards manufacturing in American vegetation additionally posed extra persistent headwinds.
Nonetheless, the BOK stated in its August financial coverage resolution that the restoration in consumption is progressively accelerating. MOTIR’s information additionally revealed that non-semiconductor exports climbed 20% in August.
If semiconductor momentum light whereas different cyclical sectors carried out properly, he stated, South Korea might nonetheless maintain annual actual development of round 2% to three%, in line with Homin Lee, senior macro strategist at Swiss non-public financial institution Lombard Odier.
The analysts’ near-term base instances additionally stay constructive. SMBC’s Ng expects total export development to stay constructive over the subsequent 12 months, though it might reasonable due to base results and stabilizing costs.
South Korea’s semiconductor and tech export growth has actually been distinctive, Lee stated, although he added that he wouldn’t characterize it as “over-reliance” as a result of the nation has different cyclical sectors that are inclined to do properly when the broader international economic system performs properly.
