Korea's exports nearly doubled in October. Half of them were chips

What happened

South Korea exported $115.3bn of goods in October, 93.7% more than a year earlier, the trade ministry said on 1 November. Reuters called it the sharpest rise in more than 50 years. Part of the jump is a calendar effect: last year the Chuseok holiday fell in October, leaving fewer working days. Measured per working day, exports still rose 76%.

Semiconductors did most of the work. Chip exports rose 259% to $56.4bn, about 49% of everything Korea sold abroad. Computer exports, mostly servers, rose almost sixfold. Exports excluding chips grew 34%. Imports rose 36% to $72.8bn, partly because of dearer oil, leaving a trade surplus of $42.5bn. Over January–October, exports reached $930bn, and the trade minister said they were all but certain to pass $1 trillion in November, which would make Korea the fourth country to do so, after the US, China and Germany.

Why exports matter so much for Korea's growth

GDP counts what a country produces, and exports are part of it: every chip shipped to a data centre in the US or Taiwan adds to Korea's output. In an economy where exports are worth a large share of GDP, a boom like this lifts growth, profits, tax revenue and the trade surplus all at once. It is why Korea's economy has been growing while households at home are cautious.

Why concentration is the catch

Memory chips are a cyclical industry: prices soar in a shortage, firms build new factories, and when the new supply arrives prices can fall sharply. In 2023, after the last boom, Samsung's and SK hynix's chip businesses lost billions. With chips now close to half of exports, Korea's growth is more tied than ever to one product and to one source of demand, AI spending by a handful of big technology companies. If that spending slowed, the effect would show up quickly in these figures.

Where it sits in the chain

This is Link 5, the real economy, through trade: spending on AI in one country becomes exports, jobs and growth in another.

What to watch

• The first 10 and 20 days of November's exports, and whether the $1 trillion mark is passed.
• Big tech companies' investment plans, which drive chip demand.
• The Bank of Korea's decision and forecasts on 26 November.