South Korea's early-May exports rebound, with semiconductors the main driver

Overview

This report tracks South Korea's trade data for the first 20 days of May. The core conclusion is that exports rebounded quickly after weakening in April, driven mainly by semiconductor exports, while exports to Taiwan, China and Mainland China also made a meaningful contribution. Imports also turned higher, with energy products and semiconductor production equipment as the main drivers. The overall trade surplus widened, indicating that external demand and tech-chain demand remained resilient in high-frequency data.

Core views

First, on a working-day adjusted basis, South Korea's exports in the first 20 days of May rose 2.8% mom sa, rebounding from -2.5% mom sa last month; total exports rose 8.7% mom sa on a positive working-day effect, and y/y growth reached 64.8%. Second, semiconductors remain the most important driver of export improvement, growing for 8 consecutive months and accelerating to 11.9% in the current period. Third, by destination, exports to Taiwan, China and Mainland China were the strongest, exports to the United States also maintained solid momentum at 7.0%, exports to the EU increased only modestly by 2.0%, and exports to Japan fell 10.6%. Fourth, the rebound in imports was mainly driven by energy products and semiconductor production equipment, with the latter posting its strongest momentum since September last year.

Analysis framework

The report uses South Korea's first-20-days trade high-frequency data, focusing on working-day-adjusted m/m changes, y/y changes, category contributions, destination contributions, and changes in the trade balance to assess export momentum and the direction of industry-chain demand.

Methodology notes

• High-frequency macro trackingWorking-day-adjusted export m/m analysis

  mom sa

  By seasonally adjusting and correcting for working-day differences, this measures short-term export momentum and avoids misreading trends because of a different number of working days in a month.

• Industry contribution analysisExport category decomposition

  Contribution from semiconductors and non-tech exports

  Break export growth into semiconductors, other tech products, and non-tech categories to identify the main sources of growth and the degree of sectoral diffusion.

• Regional demand analysisDestination export decomposition

  Contribution by major trade destinations

  Compare export changes to Taiwan, China, Mainland China, the United States, the EU, and Japan to determine whether external demand is concentrated.

Asset mapping & comparison

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

• South Korea semiconductor export chain

  Core positively correlated asset

  Strengths

  Semiconductor exports have risen for 8 consecutive months, accelerating to 11.9% in the current period and contributing about half of the overall m/m increase.

  Weaknesses

  The export improvement is highly dependent on semiconductors; if chip demand cools, overall export momentum could weaken.

  Comparison

  Compared with home appliances, computers, and mobile phones, semiconductors are the clearest source of growth.

  Risks

  Global semiconductor cycle volatility, slowing demand in major importing regions, trade policy changes, or supply-chain disruptions.

• South Korea automobiles and auto parts

  Beneficiary of the rebound in non-tech exports

  Strengths

  Non-tech exports recovered from -10.8% last month to +3.1%, with automobiles and auto parts among the key drivers.

  Weaknesses

  The rebound is smaller than that of semiconductors, and the report does not provide a specific growth rate for the auto subsegment.

  Comparison

  Compared with semiconductors, the auto chain contributes more modestly, but it shows that the export recovery is broadening somewhat.

  Risks

  Global auto demand, tariffs, exchange rates, supply-chain costs, and competitive pressure.

• South Korea steel exports

  Asset linked to improved non-tech exports

  Strengths

  Steel, together with automobiles and auto parts, helped drive a modest rebound in non-tech exports.

  Weaknesses

  The report does not disclose a stand-alone steel growth rate; the evidence is mainly directional.

  Comparison

  Steel is part of the recovery in non-tech exports, but its growth visibility is weaker than semiconductors.

  Risks

  Global manufacturing demand, steel price volatility, trade barriers, and cost pressure.

• Semiconductor production equipment

  Import-side demand-positive asset

  Strengths

  Imports of semiconductor production equipment accelerated to 21.3%, the strongest momentum since September last year.

  Weaknesses

  Strong imports may reflect capex or inventory restocking, but the report does not distinguish between sustainable demand and short-term fluctuation.

  Comparison

  Within the import mix, semiconductor equipment and energy products were the main sources of incremental growth.

  Risks

  Wafer-fab capex cycles, export controls, equipment delivery timing, and inventory adjustments.

• Energy products

  Import-side cost and trade-balance factor

  Strengths

  Imports of crude oil and petroleum products rebounded to 15.8%, showing a pickup in energy-related demand.

  Weaknesses

  Higher energy imports may compress the trade surplus going forward.

  Comparison

  Energy products contributed roughly half of import growth and, together with semiconductor equipment, explain the import rebound.

  Risks

  Oil price volatility, changes in energy demand, and exchange-rate moves.

Key data

• Exports in the first 20 days of May, working-day adjusted+2.8% mom saLast month was -2.5% mom sa, indicating a rebound in short-term export momentum.
• Total exports in the first 20 days of May+8.7% mom sa; +64.8% yoyThe m/m increase was boosted by a positive working-day effect; y/y growth reached a record high, versus 49.4% previously.
• Semiconductor exports+11.9%Growth continued for the 8th consecutive month and contributed about half of the overall m/m increase.
• Non-tech exports+3.1%Led by steel, automobiles, and auto parts, after -10.8% last month.
• Exports to Taiwan, China+20.6% mom saTogether with exports to Mainland China, this contributed about 40% of the overall export increase.
• Exports to Mainland China+10.4% mom saOne of the main sources of incremental growth by destination in this period.
• Exports to the United States+7.0%Momentum remained solid.
• Exports to the EU+2.0%Continued to grow modestly.
• Exports to Japan-10.6%The pace of decline accelerated versus last month.
• Imports in the first 20 days of May, working-day adjusted-0.4% mom saThe key-data section shows -0.4%, while the body also mentions total imports rebounding to 6.7% mom sa, which may reflect different definitions.
• Total imports+6.7% mom saAbout half of the increase came from energy-related products such as crude oil and petroleum products.
• Crude oil and petroleum product imports+15.8%The rebound in energy-related imports was an important source of import growth.
• Semiconductor production equipment imports+21.3%The strongest momentum since September last year.
• Trade balance+US$11.0bnThe prior reading was +US$10.5bn; the unadjusted trade surplus widened to the second-highest level on record.

Impact & implications

The data are a positive signal for South Korea's semiconductor export chain and related equipment demand, and they also support the view that the global electronics cycle and AI/semiconductor-related demand remain resilient. For automobiles, steel, and auto parts, the return of non-tech exports to positive territory means the export improvement is not entirely confined to semiconductors, but the growth contribution still depends heavily on the tech chain and demand from specific destinations. A wider trade surplus is favorable for South Korea's external accounts, but the rebound in energy imports also suggests that commodity prices and energy demand could affect the surplus's elasticity going forward.

Risks

• Semiconductors contribute too much to overall growth; if chip demand or prices weaken, the export rebound may not be sustained.
• Export contributions are concentrated in Taiwan, China and Mainland China, so regional demand or policy changes could amplify volatility.
• Exports to Japan fell 10.6%, showing that destination performance is not evenly balanced.
• The rebound in energy imports may raise costs and affect the trade surplus in the future.
• This report is based on high-frequency data for the first 20 days of the month; the full-month picture may be revised by later working days, order timing, or seasonal factors.

What to watch

• Whether South Korea's exports for the full month of May can sustain the strong pace seen in the first 20 days.
• Whether semiconductor exports can continue to grow and how large their contribution to overall exports will be.
• Whether export momentum to Taiwan, China, Mainland China, and the United States will continue.
• Whether the strength in semiconductor production equipment imports translates into later capex or an improvement in the capacity cycle.
• The impact of energy import growth on the trade surplus and corporate costs.
• The extent of subsequent diffusion in non-tech exports, especially automobiles, auto parts, and steel.