Korea's exports may reach their highest level in nearly five years! Semiconductors become the core growth engine

Ask AI · How can AI investment drive a five-year high in South Korea’s semiconductor export growth?

China Financial News (3月30日), edited by Zhou Ziyi According to a survey released by the media on Monday (March 30), South Korea’s March export value may grow at its fastest pace in nearly five years, as artificial intelligence investment boosts chip demand. At the same time, wars in the Middle East will, to some extent, raise South Korea’s imports and inflation.

In the median of forecasts from 11 economists, South Korea’s exports for March—Asia’s fourth-largest economy, a bellwether for global trade—are expected to rise 44.9% year on year, faster than the 28.7% increase in February. This is the strongest growth since May 2021 and also marks the 10th consecutive month of year-on-year gains.

Chun Kyu-yeon, an economist at Hana Securities, said, “Due to strong demand for memory chips, semiconductor prices have continued to rise significantly.” He also expects this year’s trade surplus to hit a record high.

Last week, official data from South Korea’s customs showed that in the first 20 days of this month, South Korea’s export value grew 50.4%, including a surge of 163.9% in semiconductor sales. Looking at details, shipments to the United States and China rose 57.8% and 69.0%, respectively, while shipments to the European Union increased by 6.6%. This growth underscores that South Korea—often dubbed a “canary in the coal mine” for the global economy amid the fighting—still has economic resilience. It also reflects the rebound in global demand and the vitality of domestic industry.

Jin-Wook, an economist at Citigroup, said that higher chip and oil prices, as well as one more working day than in the same period last year, are expected to boost trade for the month.

However, the impact of recent high oil prices will also be reflected in imports. In a monthly survey conducted on Monday (March 30), it was expected that South Korea’s March import value would increase 18.0% year on year, higher than the 7.5% rise in February. This is expected to be the largest increase since September 2022.

In response, Park Sang-hyun of iM Securities said, “We expect shipments from the Middle East to face some disruption.”

Taken together, the median forecast for South Korea’s March monthly trade surplus is $21.2 billion, up from last month’s $15.4 billion, setting a record high.

In addition, March consumer inflation may rise to 2.4%, the fastest pace in four months, while February’s inflation rate was 2.0%.

(China Financial News Zhou Ziyi)