South Korea export growth hits four-decade high on AI chip boom

South Korea's export boom, driven by AI chip demand, has reached a four-decade high. May exports rose 53.2% year-on-year to $87.75 billion, beating a Reuters poll forecast of 48.4%. It marked the 12th consecutive YoY expansion and produced a record monthly trade surplus. Semiconductors led the surge, up 169.4% to $37.16 billion as memory-chip prices climbed and AI demand grew.

The data reinforced optimism for Asia's fourth-largest economy and lifted the KOSPI index, which gained over 2%. Samsung Electronics and SK Hynix drove gains as memory-chip profits climbed amid a rally in AI-related tech. Analyst Stephen Lee of Meritz Securities said momentum could extend into the third quarter, targeting roughly 50% full-year growth. The central bank had raised its 2024 growth forecast to 2.6% from 2.0%, underscoring the upbeat outlook.

Factories also expanded in May at the fastest pace in more than five years. Semiconductor exports jumped to a record $37.16 billion, while computer sales surged 290.7% on AI server demand. Petroleum products climbed 46.6% on higher oil prices, while automobile exports fell 5.9% due to supply disruptions. Overall, the May data highlight how global AI investment is shaping trade patterns and South Korea's export-led growth.