Q3 exports up 8.8% year-on-year; cumulative total also hits all-time high

Cosmetics, semiconductor exports both set quarterly records

US overtakes China as top export destination in Q3

Auto exports fall 42% as gains vary sharply by sector

A cosmetics store in Seoul. [Yonhap]
A cosmetics store in Seoul. [Yonhap]

South Korea's small and medium-sized enterprise exports hit a record high for any third quarter this year, driven by strong performances in K-beauty and semiconductors. Rising cosmetics shipments to the United States and Europe, combined with surging demand for chips fueled by the global AI boom, powered the gains.

According to the "Q3 2026 SME Export Trends" report released Monday by the Ministry of SMEs and Startups, SME exports reached $33.4 billion in the third quarter, up 8.8 percent from a year earlier — the highest third-quarter figure on record.

Cumulative exports from January through September also set an all-time high, climbing 9.5 percent year-on-year to $96.5 billion. The number of exporting SMEs over the same period rose 1.6 percent to 90,765 companies, from 89,342 a year earlier, also a provisional record.

Cosmetics and semiconductors led the export surge. SME cosmetics exports in the third quarter reached $2.79 billion, up 28.6 percent from the same period last year, setting a third-quarter record on the back of strong growth in North America (33.1 percent) and Europe (58.6 percent). Cumulative cosmetics exports through September rose 26.4 percent to $7.65 billion.

Cosmetics export growth in Latin America was particularly striking, surging 141.3 percent. The figures point to K-beauty's expanding export base beyond its traditional strongholds in North America and Europe into emerging markets.

Semiconductor exports jumped 68.8 percent year-on-year to $1.39 billion, driven by rising demand for memory chips amid the global AI boom. Exports of semiconductor manufacturing equipment also climbed 38.3 percent to $1.14 billion. Both categories set third-quarter records.

The results were notable for showing simultaneous growth in cosmetics, a consumer goods category, and semiconductors, a high-tech industrial product. Cosmetics extended their reach from North America and Europe into Latin America, while semiconductors benefited from AI-driven demand.

However, the record headline figure did not translate into broad-based gains across all sectors. While cosmetics and semiconductors posted double-digit growth, auto exports fell by more than 40 percent.

Auto exports declined due to geopolitical instability in the Middle East and weakness in key export markets. Third-quarter auto exports came to approximately $1.5 billion, down 42.4 percent from a year earlier. Shipments to the UAE fell 66.6 percent, with broader Middle East disruptions weighing heavily on the sector.

By destination, the US emerged as the top SME export market in the third quarter. Exports to the US reached $5.73 billion, up 19.6 percent year-on-year, supported by K-beauty products gaining shelf space in major retail chains and growing demand for batteries and materials related to energy storage systems (ESS).

Exports to China rose 12.9 percent to $5.43 billion. Hong Kong exports surged 76.1 percent to $1.77 billion, driven by gains in semiconductors and wireless communications equipment.

India also continued to see steady SME export growth, with shipments rising 12 percent to $980 million, led by machine tools and other machinery as the country pushes to develop its manufacturing sector.

In contrast, total exports to the Middle East fell 7.8 percent to $1.46 billion, as sustained geopolitical tensions weighed on shipments of automobiles and some other products.

Online exports also posted sharp growth. SME online exports in the third quarter reached $470 million, up 62.4 percent from a year earlier, while the number of SMEs selling online abroad rose 35.2 percent to 3,557 companies.

Online cosmetics exports were particularly strong, jumping 97.5 percent to $360 million and accounting for 75.3 percent of total SME online exports. The United Kingdom and the Netherlands emerged as key hubs for online cosmetics exports in Europe.

Shim Jae-yoon, the Ministry of SMEs and Startups' director general for global growth policy, said SME exports — led by K-beauty — were delivering strong results not only in core markets such as the US but also in emerging markets including Latin America, despite a persistently unstable external environment. "We will continue to strengthen various support programs — including export vouchers, overseas certification assistance and joint overseas expansion with large companies — so that SMEs can grow into global enterprises," Shim said.


boo@heraldcorp.com