Chip boom lifts South Korea exports, markets hit new highs

SEOUL, Dec. 29 A poll of 11 economists published on Monday projected that South Korea's exports rose in December for the seventh consecutive month, with a median year on year increase of about 9.0 percent. That pace would be slightly faster than November's 8.4 percent gain and represents the strongest annual growth in three months, driven overwhelmingly by a boom in semiconductor shipments linked to artificial intelligence buildouts.

Trade flows in the first 20 days of December illustrated the concentration of the rebound. Overall exports rose 6.8 percent over that period while semiconductor shipments jumped 41.8 percent year on year, figures cited with the poll show. Analysts said those gains more than offset declines in other large categories, where autos, ships and steel continued to fall, and shipments to the European Union weakened even as exports to China and the United States increased.

Market commentary accompanying the poll highlighted the central role of chips. Standard Chartered economists said semiconductor exports “remain the anchor, benefiting from AI-related demand, as well as stabilising prices of legacy memory products.” Kiwoom Securities analyst Han Ji-young said South Korea's December exports “will likely record semiconductor-led growth, which can fuel a new-year rally.”

Equity markets reacted to the chip strength. The KOSPI index closed at an all time high of 3,562.97, up 3.10 percent on the day, and major chipmakers outperformed the broader market. Samsung Electronics was reported up 1.88 percent and SK Hynix rose 5.51 percent to its highest level since November 12. Other listed gainers included Samsung affiliates, LG Energy Solution, Hyundai Motor and Kia Corp. Foreign investors were net buyers of 1.72 trillion won, supporting the rally and reflecting renewed overseas appetite for Korean tech names, in part linked to partnerships between semiconductor firms and large AI companies.

Despite the upbeat headlines, several economists cautioned that the rebound lacks breadth. Stephen Lee, an economist at Meritz Securities in Seoul, warned that “there is a lack of momentum in other products. The global manufacturing sector’s capex cycle will have to be revived, which is hard to expect in the near future,” underscoring the risk that export momentum could ebb if AI related investment slows or memory prices reverse.

The poll and market signals position South Korea as a barometer of the global technology cycle. The economy, Asia's fourth largest, has seen export momentum accelerate at points this year, with September marking the fastest pace in 14 months. Policymakers and investors will be watching whether semiconductor strength can broaden into other sectors and sustain trade and earnings gains into 2026, or whether the recovery will remain narrowly concentrated in chips and vulnerable to cyclical shifts.