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Surge in Semiconductor Exports Boosts South Korea’s Economy
In a significant display of economic vitality, South Korea’s semiconductor exports have registered an unprecedented rise in prices, driven by a robust rally in artificial intelligence (AI) technology. According to the Bank of Korea, the semiconductor export-price index witnessed a monumental jump of 42.1% year-over-year in May — a historic high since records began in the 1970s. This rapid recovery comes after a notably sharp 41.4% increase in April.
Memory Industry Rebounds
The memory chip sector, dominated by giants such as Samsung Electronics Co. and SK Hynix Inc., is at the heart of this remarkable turnaround. The bulk of South Korea’s chip exports consist of memory chips, with high-bandwidth memory (HBM) specifically playing a pivotal role. These HBMs are essential components designed to work with AI accelerators produced by leading tech firms like Nvidia Corp.
The resurgence in memory chip exports has become a critical factor in propelling South Korea’s economic performance. With SK Hynix’s production capacity booked solid through 2025 and Samsung facing hurdles in getting its HBM products approved by Nvidia, the demand for these chips appears insatiable.
Drivers of Economic Growth
Memory chips, alongside smartphones and display technologies, form the cornerstone of South Korea’s tech industry. Samsung and SK Hynix, the country’s two most valuable companies, are leading the charge in this sector. The heightened global demand for AI-related chips has been a significant driver of this export surge, contributing to better-than-anticipated economic growth in the first quarter of the year.
The growing appetite for semiconductors used in AI applications has seen memory exports gain momentum since late last year. This uptick is further evidenced by data from the Korea Customs Service, indicating a 36.6% rise in chip exports for the first ten days of May alone. These numbers point to sustained double-digit growth for the entire month.
Future Prospects
As the AI boom shows no signs of abating, South Korea’s semiconductor industry stands poised for continued growth. An additional boost could come if Samsung manages to secure orders from Nvidia and competing semiconductor firms like Advanced Micro Devices Inc. This would not only solidify South Korea’s role in the global semiconductor market but also further drive the nation’s economic momentum.
