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Chips, autos set S.Korea’s May export growth at fastest pace in 32 years

The outlook remains bullish but the won’s gains, inflation could pose the risk of a “K-shaped” recovery

By Jun 02, 2021 (Gmt+09:00)

Rising global demand sends Korean exports surging to a 32-year high
Rising global demand sends Korean exports surging to a 32-year high

South Korea’s exports surged to the highest level in over 32 years in May on the back of strong demand for semiconductors and automobiles, reinforcing the view that the global economy is recovering fast from the pandemic.

The country’s outbound shipments of goods reached $50.73 billion in May, up 45.6% from a year earlier, government data showed on Tuesday.

That marked the fastest growth since the 52.6% rise in August 1988, extending on-year expansion to the seventh straight month.

The decent growth rate was due in part to base effects from the weak global commerce caused by the COVID-19 outbreak in the year-earlier period, but also reflects stronger consumer demand globally as many economies start to open, analysts said.

Export figures from South Korea, Asia’s fourth-largest economy, work as a barometer of global demand as the country is home to world-renowned manufacturers of chips, cars and other electronic gadgets.

Of 15 key export items, 12 products posted double-digit growth, led by semiconductors, oil goods, petrochemicals, cars and auto parts, according to the trade ministry.

Semiconductor shipments rose 24.5% in May from a year earlier, topping $10 billion for the first time since November 2018.

Memory chip prices rose steadily on growing demand for laptops and computer servers, the ministry said.

Outlook for Korea's chip exports remains bullish
Outlook for Korea's chip exports remains bullish


A global chip shortage has hurt production at major automakers around the globe, including Hyundai Motor Co. Still, the squeeze helped boost prices for certain types of Korean chips, industry officials said.

Earlier this year, analysts said they expect Korea’s chip exports to rise above $100 billion in 2021, led by demand for DRAM and system chips. If achieved, it would mark the country’s second-best performance since 2018, when it shipped a record $126.7 billion worth of semiconductors.

Korea is home to the world’s two leading chipmakers – Samsung Electronics Co. and SK Hynix Inc.

Exports of automobiles jumped 93.7% in May from a year ago, led by sport utility vehicles and electric vehicles.

Shipments of petrochemical products and oil goods rose 94.9% and 164.1%, respectively.

For the first five months of the year, Korea’s total exports reached $248.4 billion, higher than the $246.3 billion in the same period of 2018, when the full-year figure surged to a record high.


The government said the outlook for exports remains bullish as global commerce is recovering from the pandemic, fueled by increased vaccinations.

“All major exporting countries posted a positive turnaround in exports of intermediate goods in the first quarter. Intermediate goods account for 30-40% of Korea's total exports. That’s a good sign for Korea,” said a ministry official.

Cars parked at Hyundai Motor plant in Ulsan awaiting export.
Cars parked at Hyundai Motor plant in Ulsan awaiting export.

But analysts warned that growing inflationary pressure on the back of robust business activity and the won’s appreciation against the dollar and other major currencies will likely pose downside risks.

The dollar-won exchange rate fell to 1,107 won on June 1 from 1,228 won per dollar a year earlier, meaning the local currency’s value has strengthened, which could hurt Korea’s price competitiveness in overseas markets.

According to the Korea Economic Research Institute, an average exchange rate of 1,116 won against the greenback is the break-even point for most Korean exporters.

In a  recent survey by the research institute of 150 major Korean exporting companies, some 55.2% of respondents said they expect exports in the second half of this year to decline from the year-earlier period, citing the won’s strength and a possible cooldown of consumer demand on inflation.

“A K-shaped recovery is possible for Korea’s exports this year, with some companies rising from a slump and others falling further,” said an official at the institute.

Write to Ji-Hoon Lee at

In-Soo Nam edited this article.

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