South Korea chip boom
- South Korea's economy grew in Q1 at its fastest pace in nearly six years, driven by chip exports. - The gain is linked directly to booming semiconductor shipments tied to global AI demand. - That strength shows AI-related chip demand is creating concentrated growth pockets even as other regions show caution (reuters.com).
South Korea’s economy grew 1.7% in the first quarter, its fastest quarterly expansion since 2020, after chip exports surged on artificial intelligence demand. (usnews.com) The Bank of Korea said gross domestic product rose 1.7% from the previous quarter and 3.6% from a year earlier in January through March. That beat a Reuters poll forecast of 1.0% quarter-on-quarter and followed a 0.2% contraction in the last quarter of 2025. (usnews.com) March exports reached a record $86.1 billion, according to the trade ministry, and semiconductor shipments jumped 151.4% from a year earlier to $32.8 billion. The ministry said that was the first time monthly exports topped $80 billion. (motir.go.kr) Semiconductors are the memory and logic chips that run phones, servers and data centers, and South Korea is one of the world’s biggest suppliers. The current upswing is centered on memory used in artificial intelligence servers, including high-bandwidth memory made by companies such as SK Hynix and Samsung Electronics. (reuters.com) The Bank of Korea had lifted its 2026 growth forecast to 2.0% in February from 1.8% in November, citing a “robust semiconductor cycle” and a favorable global backdrop. By April 10, the bank said growth was still expected to slow later in the year because of a Middle East supply shock, even with chips holding up. (bok.or.kr, bok.or.kr) That split is visible inside the economy. Reuters reported that booming semiconductor demand offset weak public spending in the first quarter, while the central bank has also pointed to sluggish construction investment as a drag. (usnews.com, bok.or.kr) The export surge has also been uneven across markets. The trade ministry said March shipments to China rose 64.0% to $16.5 billion and exports to the United States climbed 47.1% to $16.3 billion, while exports to the Middle East fell 49.1% to $0.9 billion amid logistics disruptions tied to the regional conflict. (motir.go.kr) For now, South Korea is showing how artificial intelligence spending can lift a narrow slice of the global economy fast enough to move national growth data. The next test is whether chip demand can keep doing that as energy costs and trade risks rise. (reuters.com, bok.or.kr)
