South Korea’s exports continued to surge in April, boosted by strong performances by computers, electronic & electrical equipment, data released by the Bank of Korea showed on Friday. This is seen as a testament to the country’s thriving technology sector, which includes high-profile chipmakers such as Samsung Electronics and SK Hynix.
The South Korean Kospi, the country’s stock market gauge, retreated on Friday, snapping its record run, potentially amid profit taking. The Kospi’s record run should not come as a surprise as Samsung and SK Hynix, which account for over 40% of the index’s weighting, have been on a tear this year. Other regional bourses were also trading lower early Friday.
Kospi Vs Samsung Vs SK Hynix 1-Year Chart
Source: TradingView
AI-Driven Chip Boom Props Up Exports
The export price index rose 7.1% month over month (MoM), with manufacturing products accounting for almost the entirety of the weighting, rising 7%. On a year-over-year basis, the export price index jumped 40.8%, faster than March’s 29.5% increase.
Export Price Index
Source: Bank of Korea
The strong export performance was mainly fueled by higher export values rather than shipment volumes.
- Export value rose 50.2% YoY
- Export volume increased 12.4% YoY
Boosting the export growth were high-value memory chips used in artificial intelligence (AI) applications by global corporations. Computers, electronics & electrical equipment exports nearly doubled (+88.7%) from a year ago. Coal products & petroleum product exports more than doubled. South Korea, while being a crude importer, is one of the world’s biggest exporters of refined petroleum products.
The import price index, meanwhile, slipped 2.3% MoM, the first drop in 10 months, following an 18% rise in March. It, however, increased 20.2% from the year-ago period. The YoY growth, however, slightly slowed from March’s 20.4% rise. Breaking down the import performance, it climbed 16.8% YoY in value terms but edged down 0.1% in volume terms.
As export growth outpaced import growth, South Korea’s trade surplus increased by 14.3% in April relative to the previous year.
The Export Momentum Continues in May
The momentum appears to have continued in May. A Yohnap report, citing Korea Customs Service showed earlier this week that exports surged 43.7% YoY for the May 1-10 period. The import growth was at 14.9%, rendering the trade surplus at $1.7 billion.
Strong global demand for semiconductors and technology products continues to drive export momentum, and broader economic growth, despite the U.S.-Iran conflict throws a curveball on this net-energy importer.
