Korea’s exports snap 15-month gains in Jan despite higher chip sales

Container terminals at the Port of Busan, South Korea (File photo by Hyuk Choi)

South Korea’s exports dropped in January for the first time in 16 months on holidays, although the overseas sales of semiconductors, the country’s top export item, increased on strong demand for high-end products such as artificial intelligence chips, data showed on Saturday.

Exports fell 10.3% to $49.1 billion last month from a year earlier, logging the first year-on-year decline since September 2023, according to the Ministry of Trade, Industry and Energy.

“Exports temporarily slowed down in January because the month has much fewer working days than last year due to the long Lunar New Year holiday,” said Minister of Trade, Industry and Energy Ahn Dukgeun in a statement.

The holiday fell on Jan. 27-30, or Monday-Thursday, while some companies such as automakers closed on Jan. 31 to extend the festival to a full week. In 2024, one of the country’s biggest holidays was Feb. 9-12.

Ahn said the country maintained growth momentum, however, considering that overseas shipments adjusted for working-day differences increased 7.7% from a year earlier.

STRONG AI CHIP DEMAND

Semiconductor exports, which account for about 20% of South Korea’s total overseas sales, grew 8.1% to $10.1 billion, extending a winning streak to 15 months, thanks to healthy demand for premium products such as high-bandwidth memory (HBM) chips.

“Exports of high-capacity and high-value memory chips for AI and servers maintained strong growth momentum due to increasing investment in data centers worldwide,” said the ministry.

South Korea is home to the world’s two largest memory chipmakers – Samsung Electronics Co. and SK Hynix Inc. The unit of the country’s No. 2 conglomerate SK group is the top HBM supplier to Nvidia Corp., which dominates the global AI accelerator sector.

Overseas sales of computers also increased 14.8% to $820 million due to rising demand for corporate solid-state drives, the ministry said.

US President Donald Trump (File photo by Getty Images via AFP, Yonhap)

EXPORTS TO CHINA, US FALL

South Korea’s exports to China and the US fell in January due to the holiday.

Sales to China, South Korea’s No. 1 overseas market in 2024, fell 14.1% to $9.2 billion as the mainland celebrated the Lunar New Year holiday on Jan. 28-Feb. 4, the ministry said.

Exports to the US, the second-largest market, declined 9.4% to $9.3 billion due to weaker car shipments.

The decline added to concerns that US President Donald Trump’s protectionism is expected to pose a severe risk for South Korea.

Trump ordered 25% tariffs on Canadian and Mexican imports and 10% on goods from China.

The measures are predicted to slash South Korea’s car and semiconductor exports by 13.6% and 4.7%, respectively, the Korea Institute for Industrial Economics & Trade, a state-funded research institute, said.

Many South Korean companies manufacture products in Mexico for export to the US.

By Ji-Eun Ha

hazzys@hankyung.com

 
Jongwoo Cheon edited this article.

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