At Busan Port, the sight of cargo containers stacked sky-high is more than just a symbol of South Korea’s robust trade—it’s a window into the shifting fortunes of the country’s export-driven economy. As of December 14, 2025, South Korea is on the cusp of a historic milestone: for the first time, its annual exports are set to surpass $700 billion, according to data from the Ministry of Trade, Industry and Resources. But beneath the impressive headline numbers, a more complex and uneven story is unfolding—one that has policymakers, economists, and business leaders watching with both pride and concern.
The nation’s export growth, while headline-worthy, is becoming increasingly reliant on a single sector: semiconductors. From January to November 2025, total outbound shipments hit $640.2 billion, marking a 2.9 percent year-on-year increase. Yet only five out of 15 flagship export items posted any year-on-year growth, and even among those, the gains were far from evenly distributed. Semiconductors, ships, and biohealth stood out with increases of 19.8 percent, 28.6 percent, and 7 percent respectively. Automobiles and computers managed only marginal upticks of 2 percent and 0.4 percent. The rest—including general machinery, petroleum products, petrochemicals, steel, displays, textiles, home appliances, and secondary batteries—suffered year-on-year declines ranging from 8.1 percent to a steep 11.8 percent.
The reasons for this polarization are as much about global trends as they are about domestic challenges. The weakness in machinery, steel, petrochemicals, and secondary batteries has been attributed to the relentless expansion of China’s industrial sector and its aggressive low-cost competition. Korean firms in these sectors are finding it increasingly tough to compete on price alone, with many losing ground to their Chinese counterparts.
Yet, if there’s a silver lining, it’s the semiconductor industry. Riding a historic upswing fueled by the global boom in artificial intelligence (AI), chip exports reached a record $152.6 billion through November 2025. That figure now accounts for a staggering 28.3 percent of South Korea’s total exports—nearly triple the share semiconductors commanded in the early 2000s. The demand surge, driven by investments in AI servers and data centers, has signaled what many are calling a semiconductor “supercycle.”
But this very success is giving rise to new anxieties. Experts warn that such heavy reliance on a single sector leaves the broader economy exposed to sudden shocks. As the Bank of Korea noted in its latest review, “The current semiconductor boom is a double-edged sword, as heavier reliance on the sector could magnify the impact of any downturn compared with past cycles.” The Korea Institute for Industrial Economics and Trade echoed this concern in its November 24 outlook, projecting a sharp slowdown in overall export growth in 2026. While the semiconductor sector is expected to continue expanding exports of high value-added products like high-bandwidth memory, the export growth rate is forecast to fall to 4.7 percent next year from an estimated 16.6 percent in 2025.
Kim Yang-paeng, a senior researcher at the institute, put it succinctly: “While prices for legacy chips rose more sharply than anticipated this year, forecasts for next year were made more conservatively. As AI shifts from training-oriented models to inference-focused applications, semiconductor demand could moderate.” The Bank of Korea also highlighted the risk of a sharp market correction, even as it acknowledged the AI revolution as a long-term megatrend.
Against this backdrop, the government is taking steps to broaden the export base and support sectors that have struggled to keep pace. On December 14, the Ministry of SMEs and Startups announced the launch of its first export voucher project for 2026, with recruitment for participants set to run from December 17, 2025, to January 9, 2026. The goal: to help domestic and export-oriented small and medium-sized enterprises (SMEs) break into the global market. The export voucher program offers marketing services necessary for export and overseas expansion, giving companies the flexibility to choose from 15 different services, including market research, strategy development, and product and service branding.
This year’s initiative is notable for its expanded scope and accelerated timeline. In the first recruitment round, 2,000 companies—including women entrepreneurs—will be selected, with support ranging from 30 million won to up to 100 million won, depending on the scale of their exports. The budget for the export voucher program in 2026 stands at 150.2 billion won, a significant increase of 22.6 billion won over 2025. The Ministry has also moved up the announcement, which typically comes in January, in a bid to get support to companies sooner rather than later.
"The uncertainty of the external environment that SMEs feel at the export site is still high. We will actively try to distribute vouchers in a balanced manner to non-metropolitan areas that are relatively difficult to export along with rapid business execution through early public announcement," said Lee Soon-bae, global growth policy director at the Ministry of SMEs and Startups.
In addition to financial support, the Ministry plans to double its backing for international transportation logistics costs—from 30 million won to 60 million won—through 2026. New measures include comprehensive logistics agency services such as warehouse storage, packaging, delivery, and free international transportation fees for product samples. Looking ahead, the Ministry is also planning to roll out customized design services powered by artificial intelligence in the latter half of 2026, aiming to help SMEs improve their competitiveness in global markets.
These efforts reflect a growing recognition that Korea’s export future cannot rest on semiconductors alone. Ji Man-soo, a senior researcher at the Korea Institute of Finance, stressed the need for Korean companies to adopt sector-specific strategies to counter China’s persistent low-cost push. “Consumer goods makers need to clearly differentiate their products from Chinese rivals through quality and branding, while firms in capital goods and intermediate materials should prioritize stable customer relationships by leveraging supply chain interdependence rather than competing solely on price,” he advised.
For now, the numbers at Busan Port and other trade hubs tell a story of resilience and adaptation. November 2025 saw exports reach $61.04 billion, up 8.4 percent from the same month last year—a record for November, and the sixth consecutive month of breaking previous highs. But as the new year approaches, the challenge will be to ensure that this growth is broad-based and sustainable, rather than concentrated in a single, if spectacular, sector.
South Korea’s export engine is running at full throttle, but the road ahead will demand both innovation and diversification. Policymakers and businesses alike are keenly aware that the next chapter in the country’s economic story will depend on how well they can navigate these choppy global waters.
