South Korea’s exports surge to record high amid AI chip boom

South Korea's exports soared to a record high in May, posting their fastest annual growth rate in more than four decades as booming global demand for artificial intelligence (AI) semiconductors fueled a sharp increase in overseas shipments, government data.

South Korea's exports climbed 53.2% year-on-year to a record $87.75 billion in May, marking the strongest growth since January 1984 and underscoring the country's pivotal role in the global AI-driven technology boom, according to The Wall Street Journal.

The figures, released by the trade ministry on June 1, exceeded market expectations and followed a revised 48% increase in April. Economists surveyed by The Wall Street Journal had forecast export growth of 50.8%.

Imports rose 20.8% from a year earlier to $60.80 billion, resulting in a trade surplus of $26.95 billion, up from a revised surplus of $23.76 billion in April.

The export surge was driven overwhelmingly by semiconductors, as South Korea's leading chipmakers benefited from robust demand for AI-related hardware. Semiconductor exports nearly tripled from a year earlier to a record $37.16 billion in May, remaining above $30 billion for a third consecutive month after first crossing that threshold in March.

The strong performance highlights the growing importance of South Korea's technology sector, home to major memory-chip manufacturers such as Samsung Electronics and SK Hynix, amid the rapid expansion of AI infrastructure worldwide.

Exports of computers also surged, nearly quadrupling compared with the same period last year. However, several traditional industries faced challenges. Vehicle exports declined 5.9%, while steel shipments fell 2.1%, reflecting weaker demand and higher production costs.

Trade data also pointed to the uneven impact of geopolitical tensions. Exports to the Middle East dropped 7.7% amid logistical disruptions and uncertainty linked to the regional conflict, while shipments to the United States and China jumped 59.1% and 80.9%, respectively.

Despite rising energy and raw material costs associated with the conflict involving Iran, analysts expect South Korea's export momentum to remain strong throughout the year. Continued investment in AI infrastructure and sustained demand for advanced semiconductors are expected to support growth, helping offset broader economic and geopolitical headwinds.

By Sabina Mammadli