South Korea's exports eased moderately in early July, with non-chip demand the main drag

Overview

This report comments on South Korea's trade data for the first 20 days of July 2026. The core conclusion is that exports saw a moderate pullback after improving for two consecutive months, mainly dragged down by non-semiconductor technology goods, non-technology goods, and weaker exports to the United States and Taiwan. Semiconductor exports were broadly flat after strong growth over the previous nine months, suggesting that the chip supply chain was not the main source of this round of weakness. Imports also declined, and the trade surplus narrowed from last month's historical high.

Core views

Goldman Sachs believes South Korea's export momentum cooled in early July compared with the prior two months. On a workday-adjusted basis, exports in the first 20 days fell 2.3% month over month, while total exports declined 5.4% month over month. Year over year, exports still rose 52.4%, but this continued to slow from 60.2% last month. Structurally, semiconductor exports edged down only 0.3%, while other technology exports fell 11.2% and non-technology exports dropped 5.6%, indicating that external demand pressure was more concentrated in non-chip demand. By destination, exports to the United States and Taiwan declined notably and were the main contributors to the overall month-over-month pullback. In contrast, exports to mainland China extended their growth streak to a ninth month, though at a modest pace of 3.4%.

Analysis framework

The report uses a high-frequency trade data tracking framework, focusing on the sequential seasonally adjusted change in the first 20 days of July versus the prior month, with workday-adjusted export performance. It also breaks down products and export destinations to identify sources of marginal drag. Imports and the trade balance are used to help assess domestic demand, equipment-investment-related imports, and changes in the external trade balance.

Methodology notes

• Macro high-frequency dataWorkday-adjusted sequential seasonally adjusted export analysis

  per-workday exports mom sa

  By removing differences in working days and seasonal factors, this approach more accurately measures South Korea's short-term export momentum rather than relying only on unadjusted changes in headline values.

• Trade structure breakdownProduct category and destination contribution analysis

  export component attribution

  Exports are split into semiconductors, other technology goods, and non-technology goods, and combined with changes by destination such as the United States, Taiwan, mainland China, and other Asian economies to identify sources of drag.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• South Korea macroeconomy

  Marginal cooling in export momentum

  Strengths

  Year-over-year growth remains strong, and semiconductor exports are broadly stable.

  Weaknesses

  Seasonally adjusted sequential exports declined, while non-chip technology and non-technology products weakened broadly.

  Comparison

  Momentum has cooled notably versus the prior two months of consecutive improvement, and the trade surplus also narrowed from a historical high.

  Risks

  If weak external demand persists, it may weigh on industrial production, corporate earnings, and the pace of current account improvement.

• South Korea semiconductor supply chain

  Relatively resilient but with slowing momentum

  Strengths

  Semiconductor exports fell only 0.3% after nine months of strong growth, outperforming other technology goods.

  Weaknesses

  After a period of high growth, it has entered a plateau, and growth may continue to slow if end-demand does not broaden.

  Comparison

  Significantly stronger than other technology export components such as computers.

  Risks

  Demand fluctuations in key destinations such as Taiwan and the United States could affect subsequent orders and export performance.

• South Korea non-technology export sectors

  One of the main sources of drag

  Strengths

  The report does not provide clear evidence of strengths.

  Weaknesses

  Major products such as petroleum products, steel, automobiles, and auto parts broadly declined.

  Comparison

  Weaker than semiconductor export performance.

  Risks

  Weak global manufacturing and commodity demand may continue to pressure exports in related sectors.

Key data

• Workday-adjusted exports in the first 20 days of July-2.3% mom saPreviously +8.2% mom sa.
• Total exports in the first 20 days of July-5.4% mom saLast month was +5.2%; year-over-year growth was 52.4%, below last month's 60.2%.
• Semiconductor exports-0.3% mom saBroadly flat after strong growth over the previous nine months.
• Other technology exports-11.2%Computer exports fell sharply by 23.1%.
• Non-technology exports-5.6%Major products such as petroleum products, steel, automobiles, and auto parts broadly declined.
• Exports to the United States-10.4% mom saTogether with Taiwan, accounted for about two-thirds of the overall month-over-month decline.
• Exports to Taiwan-28.4% mom saOne of the main drags among major destinations.
• Exports to mainland China+3.4%Ninth consecutive month of growth, but at a modest pace.
• Imports in the first 20 days of July+1.7% mom saOn a workday-adjusted basis; previously +8.1% mom sa.
• Total imports-4.9%Higher imports of machinery and semiconductor manufacturing equipment were offset by contractions in semiconductor, mobile phone, and energy-related imports.
• Trade surplusUS$12.2bnOn a non-seasonally adjusted basis, below last month's historical high of US$17.4bn.

Impact & implications

South Korea's exports are an important high-frequency indicator of the global electronics cycle and external demand conditions. This data suggests that while the semiconductor chain remains resilient, weaker external demand for non-chip technology goods and traditional manufactured goods may reduce the breadth of South Korea's export recovery in the short term. If demand from the United States, Taiwan, and other Asian economies remains soft, the market may revise down its view on South Korea's short-term trade and industrial production momentum. Still, broadly flat semiconductor exports provide some buffer for the overall cycle.

Risks

• July data covers only the first 20 days, and full-month data may revise the current assessment.
• If the sharp declines in exports to the United States and Taiwan persist, they may place greater pressure on South Korea's overall exports.
• The simultaneous weakness in non-chip technology goods and non-technology goods suggests insufficient breadth in the export recovery.
• Contractions in energy, mobile phone, and semiconductor imports may reflect weakening demand or a softer inventory cycle.
• The report is a macro data commentary and does not provide stock-level earnings forecasts or valuation conclusions.

What to watch

• Final full-month July data for South Korea's exports, imports, and trade balance.
• Whether semiconductor exports can maintain resilience after strong growth.
• Whether non-chip components such as computers, mobile phones, automobiles, steel, and petroleum products continue to weaken.
• Whether exports to the United States, Taiwan, and other Asian economies recover.
• Whether the consecutive growth in exports to mainland China can continue and accelerate.
• Whether rising imports of machinery and semiconductor manufacturing equipment correspond to an improvement in subsequent capital expenditure.