Behind the AI-driven surge in South Korea's exports: prices are soaring, but volumes are not keeping up.

Nomura believes that South Korea's export data for June seems like a carnival, but beneath the lofty surface numbers, structural cracks have already emerged.

As previously reported by Wall Street CN, South Korea's exports surged 70.9% year-on-year to $102.25 billion in June, breaking the $100 billion mark for the first time in a single month, with growth hitting a half-century high. Semiconductor exports alone reached a record $44.8 billion in a single month, while computer shipments soared more than fourfold year-on-year.

On July 2, according to the Chasing Trading Desk, Nomura stated in its latest research report that this export boom displays extreme "asymmetry"—the frenzy in nominal value masks a contraction in actual export volumes**. The sky-high prices of memory chips driven by the AI cycle, along with the surge in energy product unit prices, are the absolute main forces pushing up the book data.**

Nomura believes that one should not be misled by the flashy export data into betting on a full-blown recovery in South Korea's real economy. Its 2026 real GDP growth forecast remains firmly suppressed at 2.4%, below consensus; strong nominal income, a weak won, and rising housing prices are giving the Bank of Korea (BOK) immense "hawkish" confidence.

Glamorous Facade: AI Frenzy Inflates Book Exports

On paper, South Korea's June trade data looks stunning.

Export growth accelerated from 53.2% year-on-year in May to 60.9%, with the average daily export growth also remaining at a high 59.5%. Meanwhile, as import growth slowed relatively (up 30.1% year-on-year), the trade surplus widened sharply from $27.0 billion in May to $36.1 billion in June.

This strong momentum is almost entirely driven by demand for AI infrastructure investment.

Semiconductors have become the absolute "dominant force" of South Korea's exports, with monthly year-on-year growth reaching 199.5%, accounting for approximately 44% of total exports in June alone. Against the backdrop of strong demand for solid-state drives (SSDs) and enterprise SSDs driven by AI data center investment, computer exports surged over 300% year-on-year.

Real Cracks: Asymmetric Boom of "Price Up, Volume Down"

As Nomura revealed the key logic in its research report, the current export boom in South Korea is largely a "price illusion."

Against the backdrop of semiconductor supply shortages, the increase in fixed prices is staggering. In June, the price of DDR5 16Gb rose from $37.5 in May to $40.0 (up 684% year-on-year); the price of NAND 128Gb rose from $26.5 to $28.2 (up 829% year-on-year).

The "volume-price divergence" in non-tech products further exposes the weakness of real economic activity. Take energy and chemicals as an example: The export value of petroleum products increased 49.8% year-on-year, but actual export volumes fell 7.0%, supported solely by a 61.0% surge in unit prices. The export value of petrochemical products rose 18.8%, while actual export volumes contracted sharply by 14.6%, with unit prices rising 39.0%.

From a macro perspective, the actual volume of exports based on customs data continues to decline year-on-year. This surge, where nominal value far exceeds actual volume, sends a signal to the market about relative weakness in real economic activity.

As Nomura aptly pointed out in the report:

"Despite strong nominal export growth, customs-based export volume data continues to decline year-on-year... The overall export boom is far stronger in value than in volume. This is crucial for GDP accounting, as the contribution of net exports to real growth may be smaller than implied by total export values."

More importantly, with the ceasefire agreement between the US and Iran, it is expected that energy inventory replenishment will lead to a significant increase in South Korea's energy imports. This means that the contribution of net exports to GDP in Q2 and beyond will be lower than in Q1, keeping the full-year 2026 real GDP growth forecast at a low 2.4%.

However, the report states that despite limited real economic impetus, the massive trade surplus, increased nominal income, and improved corporate profits are sufficient to support the Bank of Korea's optimism about growth. Combined with the weakening won and rising housing prices heightening financial stability concerns, the strong export book data provides ample ammunition for further monetary policy tightening.

Nomura expects the Bank of Korea to maintain its hawkish stance and maintains its forecast of three 25-basis-point rate hikes (July, October, and January), eventually pushing the terminal interest rate to 3.25%.

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