Driven by the surge in chip demand, South Korea's exports are expected to increase for nine consecutive months

The global artificial intelligence investment boom is driving a significant increase in semiconductor demand. As a global trade barometer, South Korea's exports in February are expected to record positive growth for the ninth consecutive month, continuing the strong momentum of this round of export expansion.

According to media surveys, the median forecast for South Korea's February export year-on-year growth rate is 24.0%. Although this is lower than January's 33.8% growth rate—at that time, it was the highest monthly growth rate since August 2021—it will still be the second-fastest year-on-year growth rate since the current consecutive growth cycle began in June 2025. Data from the first 20 days of this month has preliminarily confirmed this trend, with exports growing by 23.5% year-on-year and semiconductor exports surging by 134.1%.

The Bank of Korea raised its economic growth forecast for this year from 1.8% to 2.0% on Thursday, citing the prosperity of chip exports as a major driving factor, while signaling that monetary policy will remain stable over the next six months while keeping interest rates unchanged.

Economists point out that the increase in chip prices has exceeded expectations, and South Korea's semiconductor inventory remains low, providing support for sustained strong exports. However, due to tariff impacts, the export momentum for automobiles and machinery is insufficient, posing a certain drag. Official trade data from South Korea is scheduled to be released on March 1 (Sunday).

Driven by AI Boom, Strong Semiconductor Exports

The artificial intelligence investment boom is becoming the core incremental engine of South Korea's exports. Economists have noted that the increase in chip prices has exceeded previous expectations, and South Korea's semiconductor inventory remains low, with both factors supporting the strong momentum of semiconductor exports.

Stephen Lee, an analyst at Meritz Securities in Seoul, stated:

"There is a high possibility that semiconductor export growth will exceed 100% in the first half of the year."

In terms of export destinations, exports to China grew by 30.8% year-on-year in the first 20 days of this month, leading the growth among major trading partners; exports to the U.S. increased by 21.9%, and exports to the European Union grew by 11.4%.

Although exports continue to expand rapidly, the forecast growth rate of 24.0% is a noticeable decline from January. Reuters pointed out that the Lunar New Year holiday falling in February this year and the timing difference from last year in January often distorts the data for January and February. This February, there were only 19 actual working days, three days fewer than the same period last year, directly impacting export performance. The high base of 33.8% in January also exerts some pressure on the year-on-year growth rate for February.

Automotive and Machinery Under Pressure, Tariff Effects Highlighted

In contrast to the strong performance of semiconductors, the export momentum in the automotive and machinery sectors is clearly insufficient. Stephen Lee pointed out that these two sectors are suppressed by tariff effects, with "almost no growth momentum."

On the trade policy front, South Korean policymakers stated last week that despite new uncertainties arising from the U.S. Supreme Court ruling that Trump's emergency tariffs were illegal, South Korea will continue to advance the trade agreement reached with Washington last November.

Expanding Surplus, Central Bank Raises Growth Forecast

Reuters' survey also indicates that February imports are expected to grow by 13.0% year-on-year, higher than January's 11.6%. If realized, this would be the largest monthly increase since September 2022. The median forecast for the trade surplus is $10 billion, significantly expanding from last month's $8.71 billion The Bank of Korea maintained its interest rates while raising growth expectations, indicating that monetary policy will remain stable over the next six months, with an overall stance leaning towards cautious observation