South Korea’s China Chip Exports Rose 331% in October

By Tom Whitfield

South Korea’s exports to China rose 133.6% year on year to $26.98 billion in October, according to Yonhap News Agency, citing official data. The total exceeded $20 billion for a fifth consecutive month. China remained South Korea’s largest export destination, receiving $26.98 billion compared with $24.9 billion sent to the United States.

What drove the October export surge?

South Korea’s Ministry of Trade, Industry and Resources attributed the increase to strong shipments of semiconductors and wireless communications equipment. Chip exports to China rose 331% year on year to $14.8 billion during the first 25 days of October, a partial-month figure rather than a full-month total.

The broader trade figures confirm the scale and sector mix:

• Overall exports increased 93.7% year on year to $115.3 billion, the second-highest monthly total on record.
• Semiconductor exports rose 259% to $56.4 billion, accounting for nearly half of total shipments.
• Automobile exports increased 18.1%, while cosmetics exports rose 57.5%.

Yonhap linked the record overall result to strong semiconductor demand and continued AI infrastructure investment by major technology companies. The export surge was, above all, a semiconductor story.

How concentrated is the AI boom?

Wang Peng, a Chinese industry analyst, described the trade data as a new phase of global semiconductor growth driven by expanding AI infrastructure investment and surging demand for memory chips. He also said: “The growth is concentrated in AI-related chips rather than spread evenly across the industry.”

That concentration makes South Korea’s export performance increasingly dependent on continued capital spending by major global technology companies. His assessment explains both the strength and the exposure: AI-linked orders, rather than a uniform semiconductor recovery, now carry much of the growth. The immediate strength is real, but its narrow demand base is the central risk.

Why do China and South Korea remain so closely linked?

Wang said China’s expanding AI infrastructure and digital economy have created substantial demand for semiconductors. A long-established division of labor between Chinese and South Korean manufacturers has also supported movement of intermediate goods and components across their borders.

The scale of that relationship is material. According to the South Korean Embassy in China, two-way trade reached $263.1 billion in the first eight months of 2026, with South Korean exports to China totaling $145.4 billion. China remained South Korea’s largest trading partner, export market and source of imports, while integrated circuits and semiconductor-related components ranked among the major exports to China.

Wang said South Korea’s strengths in memory chips complement China’s advantages in electronics manufacturing, end-product applications and market scale. He put the relationship this way: “The two countries are no longer simply buyers and sellers, but are deeply embedded in each other’s supply chains.”

The trade therefore runs through the semiconductor value chain, not merely through finished-chip sales. Chinese demand and Korean supply reinforce each other across multiple production stages.

What do the new trade negotiations change?

From October 12 to 16, China and South Korea held the 17th round of negotiations on the second phase of their free trade agreement in Seoul. The talks focused on market access for cross-border services trade and investment under a negative-list approach. Both sides agreed to accelerate negotiations and work toward an early conclusion, according to China’s Ministry of Commerce.

Earlier that year, the ministry said the two countries had signed memorandums of understanding to establish a bilateral economic and trade cooperation dialogue mechanism and deepen cooperation between industrial parks. It identified high-end manufacturing, AI and green industries as areas with considerable potential for further cooperation. The negotiations remain a policy process rather than a completed agreement, although they could widen commercial links beyond chip shipments.

Where will competition and cooperation divide?

Wang said Chinese and South Korean semiconductor companies face competition in some memory-chip segments. He nevertheless saw potential for cooperation in semiconductor equipment and materials, advanced packaging and AI infrastructure.

Intelligent vehicles, industrial semiconductors and data centers could offer further opportunities, particularly as the two countries advance their FTA negotiations. Wang also said stable industrial supply chains and practical cooperation serve their common interests despite adjustments in global supply chains and intensifying technological competition. The commercial balance will include rivalry in memory, alongside cooperation in the equipment, materials and infrastructure needed to serve AI demand.

The next test is whether continued AI infrastructure spending by major technology companies sustains memory-chip demand. South Korean export momentum will depend on that spending, while competition in memory and cooperation in equipment, materials, advanced packaging and AI infrastructure will shape how value divides across the China-South Korea supply chain.