Korean exports rise for a seven consecutive month in April

[Graphics by Song Ji-yoon]

South Korea’s exports recorded a double-digit growth that was led by semiconductors and automobiles in April 2024.

According to data released by the Ministry of Trade, Industry and Energy (MOTIE) on Wednesday, Korea’s exports rose 13.8 percent on year to $56.26 billion in April 2024. It is the seventh consecutive month of growth since the country’s exports turned positive for the first time in 13 months in October 2023.

The driving forces behind this growth were automobiles and semiconductors. Korea’s exports of semiconductors totaled $9.96 billion in April 2024, up 56.1 percent from the same period a year ago, a sixth consecutive month of growth and the second largest for April on record.

Automobile exports totaled a record $6.79 billion, up 10.3 percent from the same period a year ago and surpassing the previous record high of $6.53 billion in November 2023.

“The increase was driven by exports of internal combustion engine vehicles and hybrid cars,” Choi Woo-seok, head of MOTIE’s trade and investment office, said.

Thirteen of Korea’s 15 main export items, including semiconductors and automobiles, improved on their performance compared to a year ago.

All four major information technology (IT) items - semiconductors, displays, computers, and wireless communication devices - posted positive growth for two consecutive months in April, with a combined export value recording the highest growth rate in 2024 of 46.6 percent.

Outbound shipments of displays rose 16.3 percent to $1.43 billion, while those of ships increased 5.6 percent, marking a ninth consecutive month of growth. Exports of secondary batteries, however, fell 20.1 percent, and steel exports were down by 5.7 percent.

By country, exports to the United States hit a record high of $11.4 billion in April 2024, increasing 24.3 percent from a year ago, while exports to China totaled $10.5 billion, up 9.9 percent. China was traditionally Korea‘s largest export destination for decades, but the United States has now emerged as the country’s largest export market on a monthly basis in 2024. The reversal occurred in December 2023 for the first time in 20 years, and exports to the United States continued to surpass those to China from February to April 2024.

The increase in exports to the United States is attributable to the booming U.S. consumption, which has led to an increase in exports of automobiles, Korea’s main export item, and the U.S.’ growing demand for advanced semiconductors for artificial intelligence (AI) servers. By product, automobiles accounted for $3.01 billion in exports to the United States in April, up 41.6 percent. Exports of general machinery, including excavators, also increased by 36.3 percent to $1.26 billion as the U.S. expands its domestic factory capacity. Semiconductors exports also soared 364.4 percent to $570 million.

“Korea increased its exports of low-power, high-capacity, and high-value-added memory chips, mainly for AI servers, as many U.S. companies such as Amazon.com, Inc., Microsoft Corp., and Google LLC imported DRAM from Korean companies,” MOTIE trade investment policy officer Jo Eek-no said.

On the other hand, exports to China lagged behind the United States in terms of growth, although exports of semiconductors grew by 26.5 percent to $9.52 billion. “Most of the semiconductors exported to China are for general servers,” according to Jo.

“As China‘s economy continues to slump and companies are moving their factories from China to Vietnam due to the ‘de-China’ phenomenon, Korea’s intermediate goods exports are also shifting to Vietnam,” Yang Jun-sok, a professor of economics at the Catholic University of Korea, said. “This is the result of a combination of changes in the global geography and China‘s improved technology for producing intermediate goods, which saw it reduce imports from Korea.” He added that this phenomenon could potentially be prolonged due to structural changes.