Korean exports soar as semiconductor boom drives growth

South Korea’s exports reached $61.04 billion last month, up 8.4 percent from the same month a year earlier, setting a November record. Cumulative exports through November surpassed $640 billion, breaking the previous record for the period set three years ago. Semiconductor exports alone have already exceeded the annual record. If the momentum continues, South Korea could reach its historic $700 billion export target for the year. Despite challenges, including U.S. tariff pressures, South Korean companies have turned adversity into opportunity.

Exports set monthly records for six consecutive months from June through November. The semiconductor sector, fueled by the artificial intelligence (AI) boom, has led the recovery. Semiconductor exports surged 38.6 percent from a year earlier. Cumulative exports through November reached $152.6 billion, surpassing last year’s full-year record of $141.9 billion. Auto exports also rebounded, rising 13.7 percent from a year earlier despite U.S. tariff pressures. Strong global demand for semiconductors and the proposed U.S. Investment Promotion Act, which will retroactively reduce tariffs on vehicles and auto parts from Nov. 1, are expected to support continued export growth.

If exports this month maintain last year’s level, annual exports are expected to surpass $700 billion for the first time, putting South Korea on par with export powerhouse Japan. In the past, such a comparison would have been unimaginable, but since the 2010s, Japan’s exports have stagnated while South Korea’s have grown rapidly, narrowing the gap. South Korea’s exports, which were only 7.4 percent of Japan’s in 1948 when the government was established, exceeded half of Japan’s by 2006. Nineteen years later, South Korea is on the verge of overtaking Japan in total exports.

Although exports have exceeded expectations, risks remain. The economy’s growing dependence on semiconductors is a concern, while other key sectors such as petrochemicals, machinery, shipbuilding, and steel are losing competitiveness. With U.S. tariffs taking full effect and global trade expected to slow next year, export prospects appear less optimistic than this year. Policymakers must use the current period of strong exports and a recovering domestic market to fundamentally strengthen industrial competitiveness.