From January to July this year, Korea's exports totaled $595.1 billion, more than 20% higher than Japan's $462.6 billion, according to compiled data. It is the first time Korea has surpassed Japan in exports during this period. Analysts say that if this trend continues through the end of the year, Korea's annual exports could reach $1 trillion for the first time ever and overtake Japan.
◇ Korea's exports surpass Japan; semiconductors and computers are the "star performers" amid a global boom
Until now, Korea had lagged behind Japan in exports. The turnaround came in the first half of last year. From January to June, Korea's exports exceeded Japan's for the first time. But the trend did not hold. When adding July exports, Japan ($426.5 billion at the exchange rate then) again outpaced Korea ($395.4 billion). For the full year, Japan's export aggregates ($738.3 billion) ultimately exceeded Korea's ($709.3 billion). As a result, Japan finished the year ranked fifth and Korea sixth among the world's major exporters, a one-rung gap.
This year, Korea is closing in on Japan. From January to July, Korea's exports ($560 billion) rose 51% from a year earlier. Korea beat Japan in both export value ($462.6 billion) and growth rate (15%) for January to July. It is the first time Korea's exports have outpaced Japan's.
Semiconductors and computers are the star performers of Korea's exports. Semiconductor exports reached $233.4 billion from January to July, already surpassing last year's annual exports of $173.4 billion. Over the same period, computer exports were $26 billion, nearly double last year's annual exports of $13.8 billion.
The surge in semiconductor and computer exports stems from a global boom. This year, worldwide investment in artificial intelligence (AI) has sharply increased demand for semiconductors and computer-related products, including enterprise SSDs—storage devices needed for large-scale data centers.
◇ Concerns emerge over heavy reliance on semiconductors for nearly half of exports
If the export growth from January to July continues, Korea's annual exports could surpass Japan's for the first time, analysts say. So far this year, Korea's average monthly exports are $85 billion, higher than Japan's $66 billion. Also, looking at the August data released earlier than Japan's, exports from January to August, even excluding semiconductors, were $413.4 billion, exceeding Japan's total exports for the first half ($388.2 billion).
However, concerns are rising over Korea's increasing reliance on semiconductors in exports. From January to August this year, semiconductors accounted for 47% of total export value. Including computers, the share is 52%.
In a recent report, the International Finance Center said, "After the Middle East war, the trade balances of major Asian countries deteriorated, but Korea and Taiwan saw their surpluses expand thanks to strong semiconductor exports." It added, "As the share of semiconductors within total domestic exports has expanded rapidly, attention is needed to the heightened sensitivity of the overall economy to semiconductor cycle fluctuations."