South Korea chip surge

South Korea’s economy grew 1.7% in the first quarter, its fastest quarterly pace since 2020, as chip exports surged on demand tied to artificial intelligence spending. (wkzo.com) The Bank of Korea said gross domestic product in January through March beat the median Reuters forecast of 1.0%, while exports jumped 5.1% from the previous quarter. (wkzo.com) That export burst showed up in March trade data: South Korea’s shipments rose 48.3% from a year earlier to a record $86.1 billion, and semiconductor exports climbed 151.4% to $32.8 billion. (motir.go.kr) South Korea sits near the center of the memory-chip business, and the latest boom is being driven by the hardware behind artificial intelligence data centers. Reuters reported that the Bank of Korea tied first-quarter export growth to information-technology components, including semiconductors, used in that buildout. (wkzo.com) The gains were broader than exports alone. Private consumption rose 0.5% in the quarter, facility investment increased 4.8% after shrinking 1.7% in late 2025, and the economy grew 3.6% from a year earlier. (wkzo.com) Chipmakers’ earnings show the same pattern. SK hynix said on April 23 that first-quarter revenue reached 52.5763 trillion won and operating profit hit a record 37.6103 trillion won, while Samsung Electronics said on April 7 that its quarterly profit would jump more than eightfold on artificial-intelligence chip demand. (skhynix.com) (money.usnews.com) The rebound also gives policymakers a different problem than they had at the end of 2025, when growth had contracted. Reuters reported that the stronger quarter gives the central bank more room to keep its policy rate at 2.50%, even as economists warn the lift may fade. (wkzo.com) The main risk sits outside South Korea. The trade ministry said March exports reached records despite conflict in the Middle East, but exports to the region fell 49.1% and crude oil imports dropped 5.0% as disruption around the Strait of Hormuz cut volumes. (motir.go.kr) That leaves South Korea with a strong first quarter and a fragile second one: a chip-led export boom on one side, and higher oil prices and shipping risks on the other. (wkzo.com)