AI Drives Surge in South Korean Exports: Prices Soar, but Volume Falls Behind

Nomura Securities believes that Korea’s June export data looks like a celebration, but beneath the high numbers, internal structural cracks are already showing.

WallstreetCN article previously reported that South Korea’s exports in June soared 70.9% year-on-year to $102.25 billion, breaking the $100 billion mark in a single month for the first time, with the fastest growth in nearly half a century. Semiconductor exports hit a new record at $44.8 billion for the month, and computer shipments jumped more than fourfold year-on-year.

On July 2, according to Wind Chaser Trading Desk, Nomura Securities said in its latest research report that this export boom displays extreme “asymmetry”—the surge in nominal value masks a decline in actual export volume. The sky-high prices brought by the Artificial Intelligence (AI) cycle for memory chips, and the surging prices of energy products, are the absolute main drivers behind the headline numbers.

Nomura believes that one should not be misled by the flashy export data into betting on a full-blown boom for Korea’s real economy. Its expected real GDP growth in 2026 remains firmly suppressed at a lower-than-consensus 2.4%; strong nominal income, a weak currency, and rising housing prices are giving the Bank of Korea (BOK) considerable hawkish confidence.

Flashy facade: AI frenzy ignites headline exports

On paper, Korea’s June trade data is impressive.

Export growth surged from 53.2% year-on-year in May to 60.9% in June; daily average export growth also stayed high at 59.5%. Meanwhile, as import growth slowed (up 30.1% year-on-year), the June trade surplus expanded sharply from $27 billion in May to $36.1 billion.

This robust momentum is almost entirely driven by AI infrastructure investment demand.

Semiconductors became Korea’s undisputed "king," with a staggering 199.5% year-on-year growth for the month, accounting for about 44% of total June exports. Against a backdrop of booming demand for solid-state drives (SSD) and enterprise SSDs driven by AI data center investments, computer exports soared by more than 300% year-on-year.

The real cracks: Asymmetric boom with price up, volume down

As revealed in Nomura’s report, Korea’s current export surge is largely a “price illusion.”

Amid semiconductor supply shortages, fixed prices have soared. In June, the price of DDR5 16Gb rose from $37.5 in May to $40.0 (up 684% year-on-year); the price of NAND 128Gb was up from $26.5 to $28.2 (up 829% year-on-year).

For non-tech products, the divergence between price and volume further exposes weakness in real activity. Take energy and chemicals as an example: petroleum product exports increased by 49.8% year-on-year, but actual export volume dropped 7.0%, sustained entirely by a 61.0% rise in unit price; petrochemical exports rose 18.8%, with actual export volume sharply decreasing by 14.6%, while unit price surged by 39.0%.

From a macro perspective, export volumes based on customs data continue to decline year-on-year. The surge in nominal value far outpaces that in actual volume, sending a signal of relatively weak real economic activity to the market.

As Nomura pointed out in its report:

“Despite strong nominal export growth, customs-based export volume data continues to decline year-on-year... The overall export boom is much stronger in value than volume. This is key for GDP calculations: net export’s contribution to real growth may be less than suggested by the headline export value.”

More importantly, as the US-Iran ceasefire agreement is reached, expected restocking of energy inventories will significantly increase Korea’s energy imports. This means net exports’ contribution to GDP in the second quarter and beyond will be lower than in the first quarter, and the expected real GDP growth rate for all of 2026 remains low at 2.4%.

Nevertheless, the report says that despite limited real economic boost, the large trade surplus, increased nominal income, and improved corporate profits are enough to support the BOK’s optimism for growth. Coupled with weakening Korean won and heightened financial stability concerns from rising home prices, strong headline export data brings ample ammunition for further monetary tightening.

Nomura expects the Bank of Korea will maintain a hawkish stance and keep its forecast for three 25-basis-point rate hikes (July, October and January), ultimately pushing the terminal rate up to 3.25%.

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