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AI Demand Powers South Korea’s Strongest Export Growth Since 1984

Prime Highlights

  • South Korea’s KOSPI index has surged more than 100% this year, becoming the world’s best-performing benchmark.
  • The central bank raised its 2026 growth forecast to 2.6% following the economy’s strongest quarterly performance in six years.

Key Facts

  • South Korea is Asia’s fourth-largest economy and a major global exporter of semiconductors, with chip exports growing 169% year-on-year in May.
  • Samsung Electronics and SK Hynix are the two chipmakers driving South Korea’s stock market rally amid soaring global AI-related demand.

Background

The export levels from South Korea rose to an all-time high during May as the nation saw growth in exports by 53.2%, making it the largest year-on-year growth in more than four decades. This growth exceeds the 48.4% market expectation.

The AI-driven global demand for semiconductors powered the jump, with chip export growth hitting 169% year-on-year in May. The record performance reinforced confidence in South Korea’s trade-dependent economy and added fuel to an already remarkable stock market rally.

The country’s benchmark KOSPI index rose more than 2% on Monday to reach a fresh record high, crossing 8,795 points. The index has more than doubled so far this year, driven largely by chipmakers Samsung Electronics and SK Hynix, whose profits have climbed sharply as memory chip prices soar. The index had already gained 76% the previous year, its strongest performance since 1999.

South Korea’s central bank also raised its economic growth forecast for the year to 2.6%, up from 2.0%, after the economy posted its strongest quarterly growth in nearly six years on the back of booming chip exports.

A separate survey released on Monday showed factory activity in South Korea expanded in May at its fastest pace in over five years, as manufacturers built up stocks in anticipation of potential disruptions from the Middle East conflict.

South Korea is Asia’s fourth-largest economy and widely regarded as a key indicator of broader global trade trends, making its export performance closely watched by investors and policymakers worldwide.