South korea posts record trade surplus as chip demand soars
Seoul—South Korea just pulled off something remarkable: its largest-ever monthly current account surplus. February’s figures, released Wednesday by the Bank of Korea (BOK), reveal a US$23.19 billion boost, a dramatic leap from January’s $13.26 billion and obliterating the previous record set in December 2025. The data underscores a burgeoning semiconductor upcycle and robust export performance, extending South Korea’s winning streak to 34 consecutive months—the second-longest in the nation’s history.
Semiconductor surge drives record exports
The surge is undeniably linked to semiconductors. Yoo Sung-wook, head of the BOK’s financial statistics department, pointed out it was the first time the monthly surplus exceeded $20 billion. “Despite fewer working days in February, the goods account surplus expanded to a record high thanks to record-breaking semiconductor exports,” he stated. The numbers are staggering: chip exports alone jumped 157.9% year-on-year, while IT products and computer peripherals saw increases of 103.3% and 183.6%, respectively.
What’s truly noteworthy is the sheer scale of the semiconductor boom. Average daily semiconductor exports in February hit $1.33 billion – eclipsing the $480 million daily average witnessed during the prior supercycle years of 2018 and 2022. This isn’t just growth; it's a qualitative shift.
Services deficit and shifting investment patterns
While the goods account paints a rosy picture, the services account did register a $1.86 billion deficit, primarily attributed to a rise in overseas travel demand. The primary income account, buoyed by dividend earnings, showed a $2.48 billion surplus. The financial account saw a significant net asset increase of $22.8 billion, largely driven by increased overseas direct investment by South Korean residents.
Interestingly, foreign investors trimmed their holdings, reducing investments by $11.94 billion to lock in recent gains. This suggests a degree of caution amidst the overall positive economic climate. But the BOK anticipates March to set another record, further solidifying this trend.
Geopolitical risks loom, but for now, exports prevail
Rising global oil prices, a direct consequence of the Middle East conflict, are expected to impact imports starting in April. Yoo noted that March hasn’t yet felt the full brunt, as a considerable portion of crude oil imports are based on contracts pre-dating the conflict. However, the ultimate effect on the current account will hinge on the outcomes of ongoing negotiations between the United States and Iran. For now, though, the momentum of those surging semiconductor exports continues to dominate the narrative. The surge in petroleum product exports, spurred by those very rising oil prices, adds another layer of complexity.
The South Korean economy, for the moment, is riding high on a wave of technological prowess and global demand.