South Korea March Exports Expected to Surge to Near Five-Year High Amid AI-Driven Chip Demand

South Korea's exports in March are projected to have surged at their fastest pace in nearly five years, powered by soaring global demand for semiconductors driven by artificial intelligence investment. A Reuters poll of 11 economists placed the median export growth forecast at 44.9% year-on-year — a sharp acceleration from February's 28.7% rise and the strongest reading since May 2021. If confirmed, it would mark the 10th straight month of annual export gains for Asia's fourth-largest economy, which serves as a key barometer of global trade momentum.

Semiconductor shipments have been a standout driver, with chip sales skyrocketing 163.9% in the first 20 days of March alone. Exports to the United States and China climbed 57.8% and 69.0% respectively during that period, while shipments to the European Union rose 6.6%. Hana Securities economist Chun Kyu-yeon noted that memory chip prices continue climbing sharply on the back of strong AI-related demand, and projected that annual trade surpluses could reach record levels in 2025.

However, rising oil prices linked to the Iran conflict are expected to push import costs significantly higher. Imports are forecast to have grown 18.0% in March from a year ago — up from 7.5% in February and the biggest jump since September 2022. iM Securities economist Park Sang-hyun also flagged potential disruptions to Middle East-bound shipments as a risk factor for trade flows. Despite these pressures, South Korea's monthly trade balance is projected to hit a record $21.2 billion, widening considerably from $15.4 billion in February.

Consumer inflation is also expected to have picked up, with the annual rate likely accelerating to 2.4% in March from 2.0% the previous month — its fastest pace in four months. Official March trade data is due Wednesday, April 1, at 9 a.m. local time.