South Korea’s exports soared in September 2025, outperforming forecasts and signalling resilience in global trade. Driven by skyrocketing demand for semiconductors amid the artificial intelligence (AI) boom, South Korea posted a record-high monthly export value of $65.95 billion, marking a 12.7% year-on-year increase—nearly double the market forecast of 7.2%.
This surge in exports marks the fastest growth rate in 14 months, according to South Korea’s customs agency, and represents a significant turnaround from the modest 1.2% increase in August. Favourable calendar effects, including the timing of Chuseok holidays, also contributed to the strong figures.
Semiconductors Lead the Charge
The standout sector was semiconductors, with exports hitting a record $16.61 billion, up 22% year-on-year. This growth is being directly driven by global investment in AI infrastructure, data centres, and machine learning hardware. AI’s expanding footprint—from enterprise tools to consumer applications—has triggered a major spike in demand for high-performance chips, reinforcing South Korea’s strategic position as a global semiconductor supplier.
With the AI boom likely to continue, analysts project that chip exports will remain robust into the first half of 2026, even as other sectors experience volatility.
Other Export Sectors and Destinations
Automobile exports also showed strong performance, increasing 17%, particularly in hybrid and electric vehicles. Despite this growth, exports to the United States fell 1.4%, hindered by ongoing tariff tensions. Exports to the European Union and ASEAN bloc rose sharply by 19.3% and 17.8%, respectively, while shipments to China posted a modest recovery of 0.5%, ending four months of decline.
However, not all sectors fared well. Steel exports declined by 4.2%, extending their slump for a fifth consecutive month, largely due to persistent U.S. tariffs of up to 50%.
Tariffs: The Cloud Over Growth
The bright trade data comes amid ongoing uncertainty in trade relations with the U.S. Negotiations to formalise a July deal—whereby South Korea would invest $350 billion in the U.S. in exchange for tariff reductions from 25% to 15%—have stalled. South Korean officials have expressed concern about the agreement’s impact on foreign exchange markets and broader economic stability.
With a deadline looming ahead of the APEC Summit in late October, policymakers face pressure to reach a resolution. Industry Minister Kim Jung-kwan reaffirmed the government’s intention to support exporters impacted by tariffs and emphasized the need for agility in response to evolving trade conditions.
Trade Balance and Manufacturing Activity
South Korea’s monthly trade surplus reached $9.56 billion, the largest since September 2018, and significantly higher than August’s $6.51 billion. Imports also rose by 8.2%, totalling $56.40 billion, after a contraction in the previous month.
In parallel, South Korea’s factory activity expanded in September for the first time in eight months. This signals improving domestic industrial momentum, supported by strong overseas demand—especially in high-tech and automotive sectors.
Outlook: Strength with Caution
While the current figures reflect impressive economic resilience, the road ahead remains uncertain. Economists caution that much of the export spike, outside of chips, was likely due to temporary calendar effects. A more stable and balanced export recovery is expected to emerge from late 2025 into early 2026, assuming global trade headwinds ease.
As the AI revolution continues, South Korea is poised to benefit as a key supplier of advanced manufacturing components. However, the country’s trade dynamics remain vulnerable to external political and economic factors, particularly its complex relationship with the U.S. and exposure to global tariff regimes.