South Korea Enjoys Four-Decade High Export Boom on Chip Demand
By Reuters | 31 Mar, 2026

March exports beat forecasts on an AI-driven chip boom, but the Middle East conflict casts shadow with supply disruptions.

South Korea's exports beat forecasts in March, surging at their fastest pace in nearly four decades on an AI-driven chip boom, but supply risks from the Middle East conflict cast a shadow over future prospects.

Exports from Asia's fourth-largest economy, a bellwether for global trade, rose 48.3% from a year earlier to a record high of $86.13 billion, preliminary trade data showed on Wednesday, higher than a median 44.9% increase forecast in a Reuters poll.

The annual growth rate topped the 28.7% pace in February and was the strongest since August 1988.

"Semiconductors, which have been leading growth momentum in exports, will remain strong for the time being because there are orders already taken," said Park Sang-hyun, an economist at iM Securities in Seoul.

"However, we still need to see how big the impact of the Middle East crisis will be in the coming months, as there have been supply disruptions in the petrochemical sector and high oil prices will weigh on demand in other sectors, such as automobiles."

On Tuesday, President Donald Trump said the U.S. could end its military attacks on Iran within two to three weeks and Tehran did not have to make a deal as a prerequisite for the conflict to wind down.

Markets remained jittery, however, as the comments highlighted mixed signals from Washington over how - and how soon - the war might end.

MIDDLE EAST WAR RAISES SUPPLY RISKS

A separate survey earlier in the day showed South Korea's factory activity expanded at the strongest pace in more than four years on a jump in output led by semiconductors, though the conflict dragged on overseas orders.

South Korean Industry Minister Kim Jung-kwan said the government would continue supporting firms hit by supply-chain disruptions, warning that uncertainty around export conditions was growing.

For now, tech and AI-related demand underpinned demand for Korea's manufactured goods.

Exports of semiconductors jumped 151.4% to a record high of $32.83 billion on rising memory chip prices and increasing server demand for AI investment.

Exports of petroleum products rose 54.9% on a surge in oil prices linked to the Middle East war that began on February 28, while auto sales rose 2.2% amid supply disruptions due to the conflict.

By destination, exports to China rose 64.2%, while those to the United States and the European Union were up 47.1% and 19.3%, respectively. Shipments to the Middle East dropped 49.1%.

Imports jumped 13.2% in March to $60.40 billion, after rising 7.5% in February, as oil prices rose but volume declined on supply disruptions in the Strait of Hormuz. It was weaker than a median 18.0% increase forecast by economists but still the fastest since September 2022.

The country's trade balance stood at a surplus of $25.74 billion, wider than $15.38 billion in the previous month and an all-time high.

(Reporting by Jihoon Lee; Editing by Stephen Coates and Shri Navaratnam)