Exports continue going strong thanks to semiconductors

Korean exports climbed 13.4 percent in May compared to a year earlier, the latest trade figures showed Thursday, owing to strong sales of locally-made computer chips and data storage systems.

According to data from the Ministry of Trade, Industry and Energy, outbound shipments last month totaled $45 billion, a significant improvement from a year earlier when it remained below $40 billion. Korean exports this year have so far enjoyed double-digit year-on-year growth every month.

Korean-made semiconductors once again led the charts, posting record sales of $7.99 billion. “The price of memory chips remains stable, and increasing quality of smartphones requires more advanced chips, which led to such a result,” the ministry said in its report. May marks the eighth consecutive month that semiconductor export growth has remained in positive terrain.

The ministry noted that high-end products continue to lead Korean exports. Shipments of solid-state drives, considered a more advanced version of hard drives, registered the highest figure at $440 million. The ministry projects that exports of solid-state drives for servers will jump to $13.2 billion by 2020 from $8.1 billion in 2016, a 14 percent yearly increase on average.

While internal computer hardware did well, smartphones did not. The ministry’s data showed exports of mobile communication devices plummeted by 37.0 percent. By category, shipments of completed phones fell 56.9 percent while that of mobile device parts fell 35.0 percent. Such figures may look alarming given that Samsung Electronics recently released the Galaxy S8 smartphone worldwide, but the ministry said that companies expanded overseas production of mobile devices while focusing local production on meeting domestic demand.

The report added that companies expanded local procurement of parts for mobile devices sold overseas.

Exports of completed cars rose nearly 4 percent, owing to a strong performance by eco-friendly vehicles, whose exports rose nearly 2.6 times. Shipment of auto parts, however, fell 12 percent due to flagging demand from China and the United States.

Analysts believe Korea’s exports will remain brisk in the second half of 2017.

“Although exports in the second half will slow down compared to the first half, it will still increase by nearly 10 percent,” said Lee Sang-jae, an economist at Eugene Investment & Securities. “Exports in the second half will slow down because the unit price of exports, which is closely connected to the price of raw materials like oil, will have less impact as it is likely to remain in a similar level as the first half.

“Still,” he added, “there is a high probability that the quantity of exports will increase as the economic recovery of advanced countries will have a positive impact on emerging markets.”

Thanks to strong exports this year, Korea was ranked 10th among OECD countries in terms of quarterly growth rate of real GDP. Korea’s quarterly economic growth from the first quarter stood at 0.9 percent, hovering above the global average of 0.8 percent.

BY CHOI HYUNG-JO [choi.hyungjo@joongang.co.kr]