Driven by explosive demand for memory chips, South Korea—often seen as the global economy’s "canary in the coal mine"—saw a strong rebound in overall exports in October. This resilience, closely tied to semiconductor exports, significantly outweighed the negative impact of U.S. tariffs and calendar disruptions from holidays, offering policymakers some relief amid global trade headwinds.
After adjusting for working-day differences, South Korea’s exports rose 14% year-on-year in October, following an unexpected 6.1% decline the previous month. Imports fell 1.5%, as economists expected, resulting in a trade surplus of approximately $6.1 billion. Despite fewer working days due to the Chuseok holiday (October 3–9), exports rebounded, with the adjusted figures showing even stronger growth. Since the holiday occurred in September last year, calendar effects limited year-on-year comparability, making working-day-adjusted data more statistically meaningful.
Unadjusted headline exports grew 3.6% year-on-year in October, down from a revised 12.6% expansion in September, reflecting holiday-related drag—yet still highlighting the unstoppable momentum of memory chip exports. The key driver was soaring shipments of memory chips, fueling a 25.4% surge in overall semiconductor exports, propelled by robust demand for AI computing infrastructure and traditional cloud servers.
Meanwhile, auto exports unexpectedly dropped 10.5%, while petrochemical and steel exports fell 22% and 21.5%, respectively, pressured by high input costs from tariffs and weak global industrial demand.
The data came days after South Korea and the U.S. finalized a long-awaited trade deal, capping U.S. tariffs on Korean goods at 15%. Signed during President Donald Trump’s visit, the agreement also includes a $350 billion Korean investment package in the U.S. and safeguards for Korea’s foreign exchange market. Previously, U.S. tariffs on Korean autos stood at 25%, putting manufacturers at a disadvantage against Japanese rivals, who secured a 15% rate in a September deal.
Stronger exports and the trade deal may ease pressure on the Bank of Korea (BOK) ahead of its November 27 policy meeting, allowing it to focus on curbing housing market imbalances rather than stimulating growth. The BOK has prioritized financial stability, even as Seoul apartment prices and household debt remain elevated.
Citi economist Kim Jin-wook noted that robust Q3 GDP and the U.S.-Korea trade deal could "partly alleviate the BOK’s concerns over negative GDP output gaps," while external financial stability risks may also moderate.
The export rebound underscores the pivotal role of high-end manufacturing, particularly memory chips, in Korea’s economy. Home to SK Hynix and Samsung—the world’s top memory chipmakers—South Korea dominates the AI-driven storage boom. SK Hynix, NVIDIA’s key HBM supplier, and Samsung, a leader in consumer DRAM/NAND and enterprise SSD storage, are both riding the AI infrastructure wave.
As AI applications proliferate, demand for AI chips, HBM systems, enterprise SSDs, and high-performance networking gear will continue to soar, with edge AI further boosting consumer memory demand.
Wall Street giants like Morgan Stanley declare a "memory supercycle" is here, fueled by unprecedented AI infrastructure spending. NVIDIA’s HBM partner SK Hynix reports sold-out capacity, signaling tight supply and rising prices through 2026–2027, mirroring the 2017–2018 supercycle. Nomura predicts meaningful production increases won’t materialize until late 2027, prolonging shortages for years.
The AI computing race intensified after NVIDIA CEO Jensen Huang’s GTC keynote, where he projected over $500 billion in data center revenue from Blackwell and Rubin architectures alone—excluding networking, automotive, or China sales. NVIDIA’s market cap surpassed $5 trillion, cementing its AI dominance as tech giants like Microsoft, Google, and Meta ramp up data center investments.