Middle East Tensions Pose No Obstacle: South Korea's Early April Export Momentum Remains Strong, Chip Shipments Surge 182.5%

South Korea's exports maintained strong momentum in early April, with explosive growth in semiconductor demand serving as the core driver, demonstrating that external demand remains resilient enough to withstand potential pressures from rising oil prices and currency depreciation. On April 21, data released by Korean Customs showed that from April 1 to 20, South Korea's exports grew by 49.4% year-on-year; after adjusting for working day differences, the increase was also 49.4%, surpassing the 40.4% recorded in the same period of March. Total exports reached $50.4 billion, setting a new historical record for the same period and exceeding the previous high of $36.4 billion set in April 2022. Driven by a boom in investments in artificial intelligence and data centers, semiconductor exports surged 182.5% to $18.3 billion, with their share of total exports rising by 17.1 percentage points to 36.3% compared to the same period last year, also breaking a historical record. Meanwhile, imports grew by 17.7% to $39.9 billion, resulting in a trade surplus of $10.4 billion. Notably, crude oil imports rose year-on-year for the third consecutive month. The ongoing tension in the Middle East has pushed international oil prices higher, and rising energy costs are introducing uncertainty into South Korea's inflation and economic growth outlook. Semiconductors and Computer Equipment Lead Export Growth Semiconductors were the primary engine behind this strong export performance. Data shows that in the first 20 days of April, semiconductor exports surged 182.5% year-on-year to $18.3 billion, accounting for 36.3% of total exports. Exports of computer peripheral equipment saw an even more astonishing increase, soaring 399% year-on-year to $2.2 billion, reflecting strong global demand for data center infrastructure. Exports of petroleum products grew 48.4% to $3.2 billion, ship exports increased 76.6% to $1.8 billion, and steel exports rose 8.6% to $2.6 billion, all recording significant gains. Automobiles and auto parts were among the few categories showing weak performance. Passenger car exports fell 14.1% to $3.1 billion, and auto parts exports declined 8.8% to $1.1 billion, presenting a stark contrast against the backdrop of overall export strength. Looking at import and export destinations, major markets all recorded significant growth. Exports to China grew 70.9% to $11.2 billion, exports to the United States increased 51.7% to $9.3 billion, and exports to Vietnam rose 79.2% to $5.5 billion. These three destinations combined accounted for 51.8% of total exports. Exports to Japan grew 40.7% to $2.1 billion, and exports to the European Union increased 10.5% to $4.4 billion, showing relatively moderate growth rates. Regarding imports, those from China, the United States, and the European Union grew by 29.3%, 31.5%, and 25.5% respectively, while imports from Japan decreased slightly by 1.6%. Energy Imports Continue to Rise, Oil Price Risks Cannot Be Ignored Despite the impressive export figures, rising energy costs remain a potential concern. In the first 20 days of April, crude oil imports increased 13.1% to $4.8 billion, marking the third consecutive month of year-on-year growth, amid the ongoing Middle East crisis pushing international oil prices higher. Total energy imports, including crude oil, natural gas, and coal, rose by 6.8%. The combined effect of rising oil prices and the depreciation of the South Korean won may exert pressure on domestic inflation by increasing import costs and erode corporate profit margins to some extent; this risk requires continued monitoring. Meanwhile, data also showed that semiconductor imports grew by 58.3%, and imports of semiconductor manufacturing equipment increased by 63.3%, indicating that South Korean companies are continuously increasing their investment in the chip industry chain.