Yonhap News. 

Hanmi Ilbo ColumnistWhile South Korea's exports are on the cusp of surpassing $700 billion for the first time this year, there are assessments that the structural imbalance of over-reliance on semiconductors has worsened behind this impressive record. According to the cumulative export statistics for January-November announced by the Ministry of Trade, Industry and Energy on December 7, total exports reached $640.2 billion, a 2.9% increase compared to the same period last year, marking the highest figure since 2022. 

The main driving force behind this robust performance is attributed to a significant increase in exports of memory semiconductors such as HBM, SSD, and high-performance server DRAM and NAND flash, boosted by the spread of artificial intelligence (AI) led by US big tech and the boom in data center expansion. Cumulative semiconductor exports reached $152.6 billion by November of this year. This figure already surpasses the total annual semiconductor exports of $141.9 billion from last year, as of November. 

However, excluding semiconductors, South Korea's exports actually contracted this year. Cumulative exports excluding semiconductors from January to November amounted to $487.6 billion, a 1.5% decrease from $494.8 billion in the same period last year. Among the top 15 key export items, exports increased for semiconductors (+19.8%), automobiles (+2.0%), ships (+28.6%), bio-health (+7.0%), and computers (+0.4%). However, exports of key items such as general machinery (-8.9%), petroleum products (-11.1%), petrochemicals (-11.7%), steel (-8.8%), auto parts (-6.3%), wireless communication devices (-1.6%), displays (-10.3%), textiles (-8.1%), home appliances (-9.4%), and secondary batteries (-11.8%) were sluggish.

In particular, the prolonged triple blow of high interest rates, high exchange rates, and high oil prices due to the fallout from the Russia-Ukraine war has increased cost burdens, while external uncertainties have further heightened amidst the controversy over the US's "Trump tariffs" policy. In this environment, Korea's export structure has increasingly intensified its tendency to be excessively dependent on specific items, specific countries, and specific companies. Concerns are rising that if the semiconductor market enters a period of adjustment again without effective export diversification, the shock will not only be a simple decline in exports but could also spread to the entire domestic manufacturing industry, employment, investment, and regional economies. 

The government has recently announced plans to strengthen mid- to long-term competitiveness through strategies such as a specialized semiconductor development strategy, expansion of the advanced packaging ecosystem, and the establishment of semiconductor mega-clusters in areas like Yongin, Pyeongtaek, and Hwaseong. Furthermore, the Ministry of Trade, Industry and Energy emphasized in an analysis released at the end of November that "for the export recovery trend to continue sustainably with an overall improvement in industrial structure, a structure of concurrent growth between key and new industries is essential."

However, the reality is not straightforward. The secondary battery industry, for instance, has rapidly entered a phase of slowdown after aggressive investment over the past two years, facing global oversupply and being pushed back by the overwhelming price competitiveness of Chinese companies. The petrochemical and steel industries have been directly hit by a global slowdown in demand and a contraction in facility investment due to high interest rates. While the automotive industry is doing well in terms of finished vehicles, the parts industry is struggling to escape a structural downturn. There are also ongoing criticisms that the innovation foundation of Korea's manufacturing industry has weakened. 

While it is undeniable that South Korea's exports have been boosted by the sustained record boom in semiconductors, the fact that concurrent growth has not been achieved in other industries can directly translate into structural risks. Therefore, cautious views are gaining traction, suggesting that it is still premature to judge economic recovery based solely on an increase in export value. Experts point out that "there is a need to shift focus from viewing only the quantitative growth of South Korea's exports to qualitative balance and industrial diversification."

As domestic and international economic conditions rapidly change, South Korea's exports stand at a new crossroads. The advent of the AI era signifies both a tremendous opportunity and the beginning of intense competition, and the sluggishness of major manufacturing industries demands a fundamental transformation of the existing growth structure. Even if exports achieve the symbolic record of $700 billion this year, the reality of deepening over-reliance on semiconductors behind it is becoming the starting line for new challenges, clearly showing a facet of the trials that the Korean economy will face in the future.

Hanmi Ilbo Columnist