May exports up 53.2% year-on-year; South Korea posts third straight month above $80B; semiconductors account for 42% of total

Shipping containers await export at Pyeongtaek Port in Pyeongtaek, Gyeonggi Province. [Herald DB]
Shipping containers await export at Pyeongtaek Port in Pyeongtaek, Gyeonggi Province. [Herald DB]

South Korea's semiconductor exports surged 169.4% year-on-year in May, pushing total monthly exports to an all-time high. Logistics disruptions from the Middle East war, elevated oil prices and global trade uncertainty all failed to dampen a semiconductor boom fueled by surging AI investment. With mainstay products such as automobiles losing momentum and semiconductors now accounting for more than 40% of total exports, however, concerns are growing that the country's export base has become dangerously lopsided.

May exports reached $87.75 billion on a customs-clearance basis, according to the Ministry of Trade, Industry and Energy — a 53.2% increase from a year earlier and the highest monthly total on record. The result extends South Korea's streak of monthly exports above $80 billion to three consecutive months, following $87.2 billion in March and $85.9 billion in April.

The figures look even stronger when adjusted for working days. May had 21.5 working days, one more than the same month last year, yet the average daily export value still hit a record $4.28 billion — a year-on-year increase of 60.7%.

Cumulative exports for January through May reached $394.2 billion, up 43.4% from the same period last year, making it increasingly likely that South Korea will surpass the annual export target of $740 billion the ministry set in February.

Semiconductors were the driving force. Chip exports jumped 169.4% from a year earlier to $37.15 billion in May, surpassing $30 billion for the third straight month and setting yet another all-time record.

The surge was largely driven by soaring memory chip prices as competition intensified among AI data center and server builders. DDR4 8Gb chips rose 863% over the past year — from $1.35 to $13.00 — while DDR5 16Gb and NAND 128Gb prices more than sextupled, lifting overall export values.

The concern is that export growth has become excessively dependent on semiconductors. Chips accounted for 42.3% of total exports in May — far above the mid-to-high 20 percent range seen during the 2018 super cycle. Analysts worry that the broader economy could become hostage to the semiconductor cycle: growth may hold as long as the AI boom continues, but a downturn in the chip market could drag down exports across the board.

Automobiles, the second-largest export category, fell 5.9% year-on-year to $5.83 billion, weighed down by domestic auto parts supply disruptions, the Middle East war and the expansion of overseas production.

Petroleum product exports rose 46.8% to $5.25 billion on higher unit prices driven by rising oil prices, though actual export volumes fell 23.8%.

By destination, exports to China — one of South Korea's two largest markets — climbed 80.9% to $18.9 billion, marking seven consecutive months of year-on-year growth. Exports to the United States rose 59.1% to $15.97 billion.

Imports rose 20.8% to $60.8 billion, leaving a trade surplus of $26.95 billion for the month. The cumulative trade surplus for January through May reached $101.908 billion, already surpassing the previous full-year record for annual trade surplus.

"May's positive export performance means we have now recorded year-on-year export growth for 12 consecutive months since the current administration took office," Trade, Industry and Energy Minister Kim Jung-kwan said. "The January-to-May trade surplus has also broken the previous record for a full calendar year."

He added that uncertainties remain in the trade environment — including the outcome of the Middle East war, US tariffs and the EU's steel tariff-rate quota — and pledged that the government would work closely with major trading partners to reduce trade risks for Korean companies and ensure a stable export environment.


oskymoon@heraldcorp.com