South Korea March Exports Hit Record High on AI Chip Boom

South Korea exports surged at their strongest pace in nearly four decades this March, propelled by a massive wave of demand for artificial intelligence chips. This record-breaking performance allowed the nation to overcome significant supply chain disruptions stemming from conflicts in the Middle East. Preliminary trade data released on Wednesday indicates that exports from Asia's fourth-largest economy rose 48.3% year-on-year to an all-time high of $86.13 billion. This growth surpassed the 44.9% increase predicted by analysts and represents the most significant expansion since August 1988. Semiconductor exports were the primary driver, jumping 151.4% to a record $32.83 billion as memory chip prices rose and AI-related server investments accelerated, creating a favorable environment for industry players like NXP Semiconductors N.V.. Additionally, exports of petroleum products, including those from companies like S-Oil Corporation, climbed 54.9% following a spike in global oil prices linked to the conflict involving the United States, Israel, and Iran. While auto sales grew by 2.2%, the sector faced headwinds from logistical challenges caused by the regional unrest. From a regional perspective, shipments to China saw a robust 64.2% increase, while exports to the U.S. and the European Union rose by 47.1% and 19.3%, respectively. In contrast, exports to the Middle East fell by 49.1%. On the import side, South Korea saw a 13.2% increase to $60.40 billion, driven by higher energy costs despite lower volumes resulting from instability in the Strait of Hormuz. These dynamics resulted in a record trade surplus of $25.74 billion for the month.