South Korea is on the verge of achieving its first annual export milestone of $1 trillion, but experts caution that the increase in export figures does not necessarily indicate a uniform strengthening of competitiveness across all sectors. While semiconductors have seen a boost in both price and volume, the performance of secondary batteries varies significantly by product category.
According to the Ministry of Trade, Industry and Energy's report on August trade trends, semiconductor exports surged to $46.65 billion last month, marking a 209.0% increase compared to the same month last year. This figure represents a record high, accounting for 47.5% of total exports.
The demand for high-bandwidth memory (HBM) and DDR5, driven by increased investments in artificial intelligence (AI) infrastructure from global tech giants like Google and Amazon, has contributed to this growth. The rise in memory prices, coupled with increased export volumes, has pushed semiconductor exports above $40 billion for three consecutive months.
Secondary battery exports also showed improvement, reaching $600 million in August, a 24.0% increase from the same month last year. The Ministry attributed this growth to the recovery of battery prices, an increase in new orders for electric vehicles, and the activation of the energy storage system (ESS) market.
However, the trends within secondary battery exports reveal mixed results across different categories. An analysis of trade statistics by the Korea Customs Service showed that from January to July this year, lithium-ion battery exports increased by 14.3% in value and 8.2% in weight compared to the same period last year. The export value per ton rose by 5.6%, but this figure is influenced by changes in product composition and does not directly reflect actual sales prices or product competitiveness.
For electric vehicle batteries, the export value per ton increased by 6.9%, but the export weight decreased by 14.7%, leading to an overall decline in export value by 8.8%. In the case of ESS batteries, while the export value per ton rose by 11.0%, the export weight fell by 10.6%, resulting in a slight decrease in total export value by 0.8%. Conversely, other batteries saw a 13.9% drop in export value per ton, but a 100.9% surge in export weight led to a 73.0% increase in total export value. This complexity makes it difficult to attribute the improvement in secondary battery exports solely to price increases or recovery in product competitiveness.
Past analyses of competitiveness have also highlighted significant differences by product category. A study by the Hyundai Economic Research Institute, which examined the contribution of competitiveness by product from 2022 to 2024, found that semiconductors accounted for a 12.1 percentage point contribution to competitiveness in 2024. In contrast, secondary batteries and general machinery showed contributions of -30.6 and -16.4 percentage points, respectively, largely due to intensified price competition from the expansion of low-cost lithium iron phosphate (LFP) batteries and general machinery exports from China.
However, since this analysis is based on data up to 2024, it is challenging to immediately assess recent export recoveries as indicators of strengthened or weakened competitiveness. Last month, general machinery exports also increased by 1.8% compared to the same month last year, aided by tariff reductions on certain items. Exports of general machinery to China rose by 33%.
Other sectors, such as biohealth and cosmetics, also performed well. In August, biohealth exports increased by 22.3% to $1.41 billion, while cosmetics exports surged by 52.1% to $1.31 billion, both marking record highs for August.
Lee Ye-ram, a senior researcher at the Hyundai Economic Research Institute, stated, "The increase in semiconductor exports is due not only to rising prices but also to a significant increase in export volumes, and the competitiveness in high-quality memory sectors remains strong. Given that other sectors like bio and consumer goods are also showing positive trends, further analysis is needed to determine whether the competitiveness gap between product categories is widening."
* This article has been translated by AI.
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