A 12-layer HBM4E memory chip on SK Hynix’s LPDDR5X CAMM2 memory module was placed at the company’s office in Seongnam, South Korea, on Friday, July 24, 2026. SK Hynix and Samsung Electronics plan to test investors’ appetite for memory chips as South Korea’s stock market, now a bellwether for global AI sentiment, faces wild swings driven by leveraged chips. I’ll bet. Photographer: SeongJoon Cho/Bloomberg via Getty Images
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South Korea’s semiconductor exports have been an absolute boon for Asia’s fourth-largest economy, with overall export value at an all-time high. But that frenetic pace itself raises concerns about what will happen next.
Semiconductor exports in August hit a record high of $46.65 billion, up 209% year-on-year, accounting for 47.5% of the country’s $98.25 billion merchandise exports for the month, the Ministry of Commerce, Industry and Resources announced earlier this week.
This is mainly due to demand for AI infrastructure as major cloud providers such as Google and Amazon increase capital investment.
“My estimate is that semiconductor exports accounted for nearly 80% of export growth in August,” Jeff Ng, head of Asia macro strategy at Sumitomo Mitsui Banking Corporation, told CNBC. “Overall export growth was driven by higher prices for chips, computers, and petroleum products.”
Growth in numbers like this is generally considered positive. But the pace here is so fast that it also raises concerns about if or when the boom will start to disappear.
“A gradual slowdown would be manageable. A sudden stall is another matter, because the economy is already moving at two speeds and the sectors that need to pick up the slack are now under pressure,” said Dave Chia, an economist at Moody’s Analytics.
Monetary policy could also limit the cushion if the economic cycle turns quickly. With the core inflation rate remaining high, the Bank of Korea raised the base interest rate to 3% for the second time in a row in August.
Chia warned that if chip demand cools while policy tightening continues, “the windfall will disappear if domestic demand is not strong enough to take over.”
Other more traditional sectors are also struggling. Car exports in August fell 29.8% year-on-year, with the Ministry of Trade blaming the decline mainly on the timing of the summer holidays and partial strikes. Chia also said factors such as U.S. tariffs and the shift to production in U.S. factories are also more persistent headwinds.
Still, the Bank of Korea said in its August monetary policy decision that the recovery in consumption was gradually accelerating. MOTIR data also revealed that non-semiconductor exports increased by 20% in August.
Homin Lee, senior macro strategist at Swiss private bank Lombard Odier, said South Korea could still maintain real growth of around 2% to 3% a year even if semiconductors lose momentum and other cyclical sectors perform well.
Analysts’ short-term base scenario also remains positive. SMBC’s Ng expects overall export growth to remain positive over the next 12 months, although base effects and price stability may slow overall export growth.
Lee said South Korea’s semiconductor and high-tech export boom is certainly an anomaly, but added that he would not characterize it as “over-reliance” as the country has other cyclical sectors that tend to do well when the overall global economy is strong.
