AI dividends continue to be released! South Korea's exports in August maintain strong growth, with chip exports soaring by two times

Zhitong Finance APP has learned that, driven by continued artificial intelligence (AI) demand boosting chip exports and injecting strong momentum into the overall economy, South Korea’s exports maintained strong growth in August. This leaves the Bank of Korea with little reason to retreat from its newly hawkish stance after two consecutive rate hikes.

Data released Tuesday by the Korea Customs Service showed that, after adjusting for differences in working days, exports soared 72.5% year-on-year, while imports grew by 22.5% year-on-year, resulting in a trade surplus of $34.7 billion for the month. Unadjusted export figures grew by 68.7%, exceeding July’s revised 63% increase.

Semiconductors remained the primary engine of South Korea’s export growth in August. Chip exports surged 209% year-on-year to $46.7 billion, while computer-related exports jumped 419%.

The data indicates that, despite rising energy prices and geopolitical tensions pressuring other industries, external demand has remained resilient. This further strengthened the Bank of Korea’s decision last week to raise the benchmark interest rate by 25 basis points for the second consecutive meeting. At the same time, the central bank raised its 2026 economic growth forecast from 2.6% to 3.3%, giving policymakers more room to focus on inflation.

South Korea’s overall inflation rate slowed to 2.8% in July, below market expectations, but core inflation—which excludes volatile food and energy prices—accelerated to 2.6%, showing underlying price pressures remain firm. Meanwhile, the economy grew 0.6% quarter-on-quarter in Q2, exceeding economists’ expectations.

The Bank of Korea maintained its inflation forecast, still expecting consumer inflation at 2.7% this year and 2.3% in 2027. Core inflation, excluding energy and food prices, is projected at 2.5% for both this year and next, slightly higher than previous forecasts.

Bank of Korea Governor Rhee Chang-yong stated that consecutive rate hikes help stabilize the foreign exchange market and further strengthen the Korean won. He also noted that the won still has room to appreciate further.

In recent months, the won has risen sharply, breaking through the 1,400 won to the US dollar threshold, and was the best-performing major Asian currency last month. This rebound is expected to help curb imported inflation.

In terms of export destinations, exports to China grew about 119% in August, while exports to the US increased by 89.3%. Exports to India and the EU rose by 47.3% and 14.6%, respectively.