(Bloomberg) — The price of South Korea’s semiconductor exports rose at a record pace in May, underscoring the strength of an AI recovery that is boosting the country’s economic dynamism.
Bloomberg’s Most Read
The notoriously cyclical memory industry, led by Korea’s Samsung Electronics Co. and SK Hynix Inc., is quickly recovering from a recession, with the country’s semiconductor export price index jumping 42.1% from a year ago in dollar terms, according to the Bank of Korea data released on Friday. The majority of the country’s chip exports are memory, and the increase is due in part to high-bandwidth memory designed to pair with artificial intelligence accelerators like those made by Nvidia Corp.
The increase in costs in May is the fastest increase ever recorded, with data going back to the 1970s, and follows a 41.4% recovery in April. HBM has become a bottleneck in AI chip production, with SK Hynix’s production capacity largely exhausted by 2025 and Samsung facing challenges getting its product approved for use by Nvidia.
Memory chips are the mainstay of South Korea’s technology industry, along with smartphones and displays. Samsung and SK Hynix are also its two most valuable companies. As global demand for chips used in AI development increases, memory exports have been rising since late last year, adding to the momentum that helped Korea’s economy expand more than expected in the first quarter.
Chip exports rose 36.6% in the first 10 days of May, according to the Korea Customs Service, suggesting double-digit growth will likely continue throughout the month. Shipments could receive an additional boost if Samsung is able to secure orders from Nvidia and rival chipmakers such as Advanced Micro Devices Inc.
Bloomberg Businessweek Most Read
©2024 Bloomberg LP
