South Korea’s semiconductor exports surged to a record high in June on strong global demand, data from the trade ministry revealed. The country’s total exports reached $57.07 billion in June, a 5.1 percent annual increase. Meanwhile, imports reached $49.07 billion, declining 7.5 percent year-on-year. As a result, South Korea posted a trade surplus of $8 billion, marking a ninth consecutive month of surpluses.
Semiconductor exports lead trade growth
Semiconductor exports propelled South Korea’s trade surplus, contributing a record $13.42 billion of the $57.07 billion total. This marks a 50.9 percent increase compared to May and the eight consecutive months of annual growth. June saw the highest monthly figure for semiconductor exports since reaching $13.19 billion in March 2022.
The trade ministry revealed that the strong demand for high-performance memory chips like DRAM for artificial intelligence (AI) servers has led to a recovery in exports.
South Korea’s exports
Following semiconductors, exports of cars, the second-largest export item in South Korea, saw a 0.4 percent annual decline to $6.2 billion. Despite the decline, the sector remains stable as automobile exports have surpassed $6 billion every month this year excluding February.
Car exports reached $37 billion in the first half of this year, seeing a second record high in June, backed by an increase in the exports of hybrid cars.
With the surge in demand for semiconductors, South Korea’s exports during the first six months of this year reached $334.8 billion, up 9.1 percent year-on-year. That is the second-highest amount South Korea has recorded following the $350.5 billion record high during the first half of 2022.
The trade balance during the first half of the year reached $23.1 billion, the highest since $31.1 billion in 2018.
U.S., Korea’s top export destination
The U.S. was South Korea’s top destination for exports. The country’s outbound shipments to the U.S. reached $11.02 billion in June, rising for 11 months straight since August last year. Meanwhile, exports to China rose 1.8 percent to $10.7 billion, making China the country’s second-largest partner for exports.
South Korea’s exports to China declined 19.9 percent to $124.8 billion in 2023, according to a report from the Institute for International Trade under the trade lobby group Korea International Trade Association. With the decline in export volume, the trade balance with China reached a deficit of $1.81 billion last year, marking the first deficit between the two countries for the first time since 1992.
“(Korea) has to respond to the changes in China’s industrial structure by targeting the consumption market of China with final goods, instead of only eyeing the intermediate goods (demand) of China,” the report stated.
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