South Korea July exports jump 62.8% to $98.9B on chip boom

South Korea's July exports rose 62.8% to $98.89 billion, the second-highest monthly total on record, as AI-driven memory chip shipments surged 179%.

South Korea's exports rose 62.8% in July to $98.89 billion, the second-highest monthly total on record, as AI-driven memory chip shipments surged 179% and kept the trade surplus near historic highs.

"Amid the strong performance of semiconductors, 19 of the country's 20 major export categories posted gains," Kim Jung-kwan, industry minister, said, pointing to a diversified export portfolio.

Imports climbed 26.5% to $68.56 billion, producing a $30.32 billion surplus that eased from June's record $36.09 billion. Excluding chips, exports rose 26%. Shipments to China nearly doubled to $21.68 billion, while those to the U.S. jumped 68.7% to $17.4 billion on AI data-center investment, and ASEAN and EU destinations rose 73.7% and 55.7%, respectively.

The data strengthens the case for further Bank of Korea tightening. The central bank raised its base rate 25 basis points to 2.75% last month, its first hike since early 2023, and Governor Shin Hyun Song has said more increases may be needed. July consumer prices rose 3.2% and the economy expanded 0.6% in the second quarter, supporting that path.

Chip boom drives record export run

Semiconductor exports reached $41 billion, topping $40 billion for a second straight month, as global prices for DRAM and NAND stayed elevated on demand from AI data centers. "The popularization of AI technology, with the industry entering the era of agentic AI, continued to drive demand for memory chips used in servers," the trade ministry said. Computer exports surged 404%, showing how broadly AI-related demand has spread.

The strength follows blockbuster earnings from Samsung Electronics and SK Hynix. Samsung reported chip profits that increased more than 250-fold and warned that global semiconductor shortages could persist through 2028, while SK Hynix posted record net profit up 13-fold. The last time chip exports grew this fast was during the 2017-18 memory upcycle, when DRAM prices roughly doubled within a year.

Rate path in focus

The export momentum gives the BOK cover to keep tightening. Most economists expect another hike by October, with some seeing action as early as the Aug. 27 board meeting, according to Bloomberg. Governor Shin said the central bank's May growth forecast of 2.6% now looks too low and will be revised up "substantially" in August, citing stronger-than-expected exports, investment and consumption.

Risks remain. Kim flagged growing protectionism in major economies and persistent Middle East geopolitical uncertainty as headwinds. Exports of home appliances fell 4.1% to $600 million, the only decline among the top 20 categories, on sluggish U.S. housing demand.

This article is for informational purposes only and does not constitute investment advice.