S.Korea’s 2024 exports get off to strong start on China, semiconductors

South Korea’s exports, the country’s main growth driver, got off to a robust start in January, buoyed by a rebound in semiconductor shipments and strong demand from China – the latest indication that Asia’s fourth-largest economy is faring better than expected.

Korea’s outbound shipments last month rose 18% from a year earlier to $54.69 billion, data from the Ministry of Trade, Industry and Energy showed on Thursday.

The percentage marks Korea’s first double-digit growth in 20 months and a rise for the fourth straight month. In December, exports grew 5%.

Korea’s imports fell 7.8% on year to $54.39 billion, resulting in a monthly trade surplus of $300 million. The decline, following a 10.8% fall in December, was the slowest since March 2023.

Having additional work days in this year’s January due to shifting dates for the Lunar New Year holidays could make the trade data look stronger than it seems.

But analysts said brisk overseas sales of chips, cars and other major items indicate Korea’s exports largely remain strong.

Average daily exports, after taking the additional working days into account, stood at $2.28 billion in January, up 5.7% from $2.16 billion in the same month last year.

FASTEST CHIP EXPORT GROWTH IN 6 YEARS

Korean exports of semiconductors, the country’s top export item, increased 56.2% on year to reach $9.37 billion – posting the fastest growth rate in six years and extending gains for a third month.

January’s chip exports, however, slowed from the previous month’s $11 billion.

Korea is home to the world’s two largest memory chipmakers, Samsung Electronics Co. and SK Hynix Inc.

While reporting a narrower fourth-quarter chip loss on Friday, Samsung offered an upbeat 2024 outlook, with its forecast that the industry recovery will accelerate in the second half.

SK Hynix, which turned a profit in the final quarter of 2023, said last month it would significantly increase high-performance DRAM production capacity to meet rising demand for artificial intelligence chip demand.

EXPORTS TO CHINA REBOUNDS

By destination, exports to China, Korea’s top trading partner, rose 16% on year to $10.7 billion, ending a 19-month steak of monthly declines.

The US returned as Korea’s second-largest trading partner after having briefly replaced China as the No. 1 partner in December.

Shipments to the US gained 26.9% on year to $10.2 billion last month, posting the highest value for any January.

Exports to the 10-country Association of Southeast Asian Nations (ASEAN) region rose 5.8% from a year ago, while exports to Japan and India increased 10.6% and 5.6%, respectively.

Shipments to the European Union advanced 5.2%.

Of 15 major export items, 13 types of goods posted year-on-year growth.

Ministry data showed the country’s car exports climbed 24.8% to $6.2 billion last month – the highest for any January.

Ship exports spiked 76% while petrochemical products grew 4%.

"Although external conditions surrounding our exports are still difficult, our shipments to China have turned positive, boding well for our 2024 outlook,” said Trade Minister Ahn Deok-geun.

“The government will do its best to help our industries meet the challenging goal of achieving the highest-ever export performance this year.”

Write to Han-Shin Park at phs@hankyung.com

In-Soo Nam edited this article.