AI demand helps Korean chip export prices to record jump in May

The price of South Korea’s semiconductor exports rose at a record pace in May, underscoring the strength of an AI rally powering the country’s economic momentum.

The notoriously cyclical memory industry, led by Korea’s Samsung Electronics Co. and SK Hynix Inc., is bouncing back from a downturn rapidly, with the nation’s semiconductor export-price index jumping 42.1 per cent from a year earlier in dollar terms, according to Bank of Korea data released on Friday. Most of the country’s chip exports are memory, and the surge is partly down to high-bandwidth memory designed to pair with artificial intelligence accelerators like those made by Nvidia Corp.

The May cost increase is the fastest rise on record, with data stretching back to the 1970s, and follows a 41.4 per cent pickup in April. HBM has grown into a bottleneck for AI chip output, with SK Hynix production capacity largely sold out through 2025 and Samsung facing challenges in getting its product approved for use by Nvidia.

Credit: Bloomberg Photo

Memory chips are the mainstay of South Korea’s tech industry along with smartphones and displays. Samsung and SK Hynix are also its two most valuable companies. As global demand rises for chips used in AI development, memory exports have been picking up 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 per cent for the first 10 days of May, according to Korea Customs Service, suggesting the double-digit growth is likely to continue for the full month. The shipments may get a further boost if Samsung is able to secure orders from Nvidia and rival chipmakers like Advanced Micro Devices Inc.