South Korea’s exports saw the largest increase in nearly fifty years, with AI chip demand driving monthly export volume to surpass $100 billion for the first time.

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The global wave of artificial intelligence is reshaping South Korea’s trade landscape. In June, South Korea’s monthly export volume surpassed $100 billion for the first time, with a year-on-year growth rate hitting a nearly half-century record high. Demand for AI hardware—represented by semiconductors—has become the core driver of this round of trade expansion.

According to preliminary data released Wednesday by South Korea’s Ministry of Trade, Industry and Energy, June exports surged 70.9% year-on-year to $102.25 billion, setting a new monthly record. The growth rate was the fastest since October 1978, easily surpassing the revised 53.4% increase in May. The data far exceeded the median forecast of 57.3% from a Wall Street Journal survey of nine economists.

This historic data was released just days after the government announced major strategic initiatives. South Korea, together with top memory chip makers Samsung Electronics and SK Hynix, launched a massive investment plan aimed at deepening the country’s position in the global semiconductor supply chain and addressing competitive pressure.

Chip and AI Spur Comprehensive Export Acceleration

Semiconductors remain the main driver of South Korea’s overall export growth. Ministry data shows that June chip exports reached $44.82 billion, setting another monthly record. Computer exports were up more than fourfold year-on-year, and shipments of wireless communication devices like smartphones rose by 51%. The pulling effect from AI-related demand on South Korea’s exports is extending from memory chips to a broader range of tech hardware.

By destination, exports to the United States grew 79% year-on-year, and those to China increased 92%, with both major markets showing strong momentum.

Historically, South Korea’s May export growth had already set the strongest record since 1984, and June’s breakthrough suggests this expansion trend hasn’t peaked. The Ministry defines the robust performance of chip exports as the core factor driving overall growth.

The strong export performance also brought a substantial expansion in the trade surplus. Imports in June rose 30.1% year-on-year to $66.1 billion, creating a trade surplus of $36.15 billion, which broke the $30 billion mark for the first time. In contrast, after revision, May’s trade surplus was $27.04 billion.

The record-setting data comes against the backdrop of accelerated strategic planning by the South Korean government and industry. Recently, the government teamed up with Samsung Electronics and SK Hynix to launch a massive investment plan, aiming to further solidify the country’s core position in the global semiconductor supply chain and fend off intensifying competition in advanced chips from rivals.

K-shaped Divergence: Non-Tech Sectors Under Pressure

Despite the impressive headline data, June’s trade numbers also reveal noticeable internal division within the South Korean economy—the so-called “K-shaped growth” pattern.

Auto parts exports fell 2.4% year-on-year, and vehicle exports grew just 5.8%, much slower than tech products like semiconductors. Exports to the Middle East fell 8.4% year-on-year. The region’s continued tensions are presenting supply chain and logistics obstacles, and despite a fragile ceasefire between the US and Iran, related pressures haven’t fully dissipated.

The Ministry noted that non-tech sectors are still facing high raw material costs, supply constraints, and logistical challenges stemming from situations in the Middle East, with an obvious uneven distribution of economic returns.

Moreover, several institutions are growing more optimistic about South Korea’s outlook. Banks like ING and Citigroup have recently raised their forecasts for South Korea’s economic growth, citing capital spending expansion driven by government-led AI investment plans. ING economists said exports will continue to play a leading role in growth while laying the foundation for stronger private consumption, government spending, and corporate investment.

The risk from energy-driven inflation crises is fading, and robust ongoing demand for AI-related products is providing support for the broader economic outlook. Samsung and SK Hynix’s combined investment commitments of over $520 billion inject a longer-term institutional guarantee for sustaining this momentum.

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