Exports slip 7.4 pct in 2023 on weak chip demand

South Korea’s exports decreased 7.4 percent on-year in 2023 amid the sluggish performance of chips coupled with global economic uncertainties, industry ministry data showed Monday.

Outbound shipments stood at US$632.6 billion last year, according to data compiled by the Ministry of Trade, Industry and Energy.

Imports decreased 12.1 percent on-year to $642.7 billion in 2023, resulting in a trade deficit of $9.97 billion.

The industry ministry attributed the sluggish exports in 2023 to the global monetary tightening moves, coupled with the delayed recovery of the Chinese economy.

Nevertheless, it noted that exports of automobiles remained solid throughout 2023, with outbound shipments of semiconductors also recovering gradually.

For December, monthly exports advanced 5.1 percent on-year to $57.6 billion, rising for the third consecutive month.

Exports, a key economic growth engine for South Korea, rebounded in October after 13 months of an on-year decline.

Imports moved down 10.8 percent on-year last month to $53.1 billion, resulting in a trade surplus of $4.48 billion. It marked the second consecutive month for exports to outpace imports.

By sector, exports of chips moved up 21.8 percent on-year in December to $11 billion, rising for two consecutive months in yet another sign of a rebound.

Exports of semiconductor products are anticipated to maintain a recovery down the road, driven by the release of new mobile products and increased corporate investments in the artificial intelligence sector, the ministry said.

For all of 2023, semiconductor exports fell 23.7 percent on-year to $98.6 billion.

“The recent milestone of chip exports exceeding the $10 billion mark for the first time in 15 months in December serves as a barometer that outbound shipments have entered an upcycle,” Industry Minister Bang Moon-kyu said in a statement.

Outbound shipments of automobiles also gained 17.9 percent to $6.3 billion, maintaining the growth for 18 consecutive months. The growth was mainly led by premium models, including electric cars and SUVs, setting a fresh high for any December.

Exports of display products added 10.9 percent to $1.52 billion following the rising demand for OLED products.

Overseas sales of home appliances edged up 2.9 percent to $591 million on the rising demand for eco-friendly models with better energy efficiency, the data showed.

By destination, the United States emerged as the top export destination for South Korean goods for the first time since June 2003, with outbound shipments advancing 20.8 percent to $11.2 billion.

The strong performance followed robust shipments of automobile and machinery products, along with chips, mobile products, home appliances and steel, the ministry said.

Exports to China, on the other hand, fell 2.9 percent on-year to reach $10.9 billion in December, due to the weaker demand for steel amid the slump in the real estate sector.

For all of 2023, exports to the U.S. came to $115.7 billion, up 5.4 percent on-year, while those to China slipped 19.9 percent to $124.8 billion.

The industry ministry added that the government aims to continue addressing external risks, including the growing concerns over the maritime security in the Red Sea, to maintain the export momentum.