South Korea exports post strongest growth since 1978 on AI chip boom

By Jihoon Lee

SEOUL, July 1 (Reuters) - South ‌Korea's exports expanded ​at ​the strongest pace in nearly half a century last month, smashing forecasts, on a surge in chip sales propelled by the global boom in AI investment.

Exports from ‌Asia's fourth-largest economy rose 70.9% in June from a year earlier to $102.25 ⁠billion, quickening from the 53.4% jump in May and marking the biggest year-on-year increase since October 1978, preliminary trade ‌data showed on Wednesday.

The annual percentage ‌growth rate topped the median 61.0% increase forecast in a Reuters poll, beating all 13 projections provided by economists.

Semiconductor exports surged 199.5% to $44.8 billion, making South Korea the fourth country ​in the world to reach a monthly export value of $100 billion, after Germany, China and the United States, according to the trade ministry.

"Exports will remain robust in the second half, ⁠led by semiconductors. There is no sign of the chip boom waning anywhere, so it won't easily cool down next year ​either," said Park Sang-hyun, an analyst at iM Securities.

"Still, growth rates are seen nearing a peak," Park added.

Home to the world's biggest chipmakers Samsung ​Electronics and SK Hynix, South Korea's exports have been ‌rising since June 2025 and posting double-digit growth rates from December as global demand for AI investment drives up memory chip prices.

A separate survey ⁠showed on Wednesday that South Korea's factory activity expanded in June for the seventh consecutive month but at a slower pace than the previous month on falling export demand.

In June, computer sales also rose 308.8% on ⁠increasing AI investment by major technology firms, while steel products snapped 13 months of decline to rise 9.6% ​on data center construction. Petroleum products rose 49.8% on high oil prices.

By destination, shipments to China and the U.S. were up 92.1% and 78.6%, respectively, while those to the European Union rose 31.8%. Exports to the ‌Middle East fell 8.4%.

Imports rose 30.1% to $66.10 billion, after rising 20.7% the previous month. That was faster than the 26.3% increase expected by ‌economists and the fastest since May 2022.

The country posted a monthly trade balance of $36.15 billion, the biggest on ⁠record, bringing its trade surplus for ‌the first half of the ​year to $138.3 billion, compared with an annual surplus of $77.4 billion for the whole year of 2025.

(Reporting by Jihoon Lee; Editing by Tom Hogue, Jacqueline Wong and ‌Stephen Coates)

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