South Korea is poised to achieve a historic milestone, with annual exports projected to exceed $700 billion for the first time ever. This surge is largely fueled by soaring global demand for semiconductors, particularly driven by advancements in artificial intelligence, though underlying weaknesses persist in other key sectors of the nation’s export economy. According to data released by the Ministry of Trade, Industry and Energy, the country’s export performance through November reached $640.2 billion, marking the highest January-November total in three years and signaling continued economic resilience amid global headwinds.
South Korea’s annual exports are on track to surpass $700 billion for the first time ever, though shipments excluding semiconductors are projected to decline this year, according to new data released by the country’s Ministry of Trade, Industry and Energy. The milestone comes as a surge in demand for semiconductors, fueled by the artificial intelligence boom, has masked weakness in other key industries.
Through the first 11 months of 2023, total exports reached $640.2 billion, a 2.9% increase compared to the same period last year. This represents the highest figure for the January-November timeframe in three years, exceeding the $628.7 billion recorded in 2022. If December figures remain strong, the country is expected to achieve a record-breaking export total for the year.
Semiconductor exports have been the primary driver of this growth, reaching a cumulative value of $152.6 billion as of November. This already surpasses the previous annual record of $141.9 billion set in 2022, with one month of data still to come. The strong performance in this sector has offset declines in areas like steel, petrochemicals, and secondary batteries, which have been impacted by U.S. tariffs.
However, excluding semiconductors, South Korea’s exports have experienced a 1.5% decrease year-to-date, totaling $487.6 billion during the first 11 months of the year. Ten of the 15 major export items tracked by the ministry registered negative growth.
Specifically, exports of machines, petroleum products, petrochemicals, steel, and auto parts declined by 8.9%, 11.1%, 11.7%, 8.8%, and 6.3% respectively. Conversely, semiconductors saw a 19.8% increase, automobiles rose 2.0%, ships jumped 28.6%, and bio-health products increased by 7%, while computer exports edged up 0.4%.
Semiconductors now account for 28.3% of the nation’s total exports as of November – the highest share this year. The sector’s contribution has remained above 20% throughout 2023, a significant increase from the 10% range seen between 2002 and 2010.
Despite the positive overall figures, some analysts have cautioned that South Korea’s heavy reliance on semiconductor exports poses a risk to the broader economy should demand cool. “It is true that Korean exports are heavily dependent on semiconductors,” said Kang Kam-chan, head of the ministry’s trade and investment office. “But even excluding this item, exports have only fallen by 1.5%, which is a relatively good result.”
Kang added that concerns about declining exports in steel, automobiles, and petrochemicals due to U.S. tariffs have not materialized to the extent initially feared. He also highlighted the strong performance of shipbuilding and biotechnology as key pillars of export growth this year.
