Under the frenzy of AI computing power, there has been a surge in demand for storage chips! South Korea's exports rebounded against the headwinds of tariffs and holidays.

Driven by the massive expansion of storage chip demand, which is seen as a "canary in the coal mine" for the global economy, South Korea's overall exports rebounded strongly in October, closely tied to semiconductor exports. The robust resilience demand surpassed the negative impact of US tariffs and calendar disruptions related to holidays, bringing some comfort to policymakers navigating the global trade headwinds. Adjusted for differences in working days, South Korean exports increased by 14% year-on-year in October, bouncing back from an unexpected 6.1% decline in the previous month. Imports, as expected by economists, decreased by 1.5%, resulting in a trade surplus of approximately $6.1 billion. Despite a significant reduction in working days due to the Korean Mid-Autumn Festival in October (October 3-9), exports rebounded, and after adjustment for working day differences, exports were even stronger. Key drivers of this rebound were the ongoing strong scale of storage chip shipments, leading to a significant 25.4% year-on-year increase in semiconductor exports. This was mainly due to the strong demand for artificial intelligence computing infrastructure and traditional cloud computing servers. South Korea's car exports unexpectedly decreased by 10.5% in October, while petrochemical and steel exports declined by 22% and 21.5%, respectively, primarily due to high input costs resulting from tariffs and ongoing weak global industrial demand. The data was released shortly after South Korea and the US finalized a long-awaited trade agreement, setting a tariff cap of 15% on US imports of Korean goods. The agreement, reached during US President Donald Trump's visit to South Korea, also includes a $35 billion investment plan by Korea in the US and vital safeguards for Korea's foreign exchange market. Before the US-Korea trade agreement was signed, US tariffs on Korean car imports remained at 25%, putting Korean automakers at a disadvantage when exporting to the US market. However, after visiting South Korea and signing the trade agreement, Trump announced that these tariffs would now be significantly reduced to 15%. The stronger export data, combined with the US-Korea trade agreement, may bring some relief to South Korea before the Bank of Korea's next monetary policy decision on November 27, easing the pressure to stimulate economic growth and allowing the central bank to focus on addressing the imbalance in the housing market. The Bank of Korea has stated that its primary goal is to maintain overall financial stability in Korea, despite high apartment prices in Seoul and rising household debt. The recent export data highlights the importance of the semiconductor industry, particularly the crucial role of storage chips, in driving South Korea's economic growth. With the surge in demand for storage chips driven by the construction of AI data centers worldwide, South Korea is moving towards an unprecedented super cycle. Storage chips are crucial for South Korea's exports and economy, as the country is home to the world's two largest storage chip manufacturers - SK Hynix and Samsung. SK Hynix, a global leader in HBM, has become a core supplier of HBM for NVIDIA Corporation's AI GPU cluster. Samsung, another storage giant, is one of the world's largest technology companies and the leading supplier of consumer electronics-grade DRAM and NAND storage chips, as well as enterprise-grade NAND storage components. Samsung has also become a supplier of HBM storage systems for NVIDIA Corporation's flagship AI GPU cluster products - the GB200/GB300 series. As breakthrough AI applications like AI smart bodies penetrate various industries worldwide, the demand for AI computing infrastructure, including AI chips, HBM storage systems, enterprise-level SSDs, high-performance networks, and power equipment, will continue to skyrocket. Additionally, the AI boom on the edge will drive consumer electronics-grade DRAM and NAND storage demand in a new growth curve. The storage industry is experiencing a "super cycle" as global acceleration and unprecedented AI infrastructure expansion lead to a fierce competition in AI computing power. Wall Street giants like Morgan Stanley are proclaiming that the "storage super cycle" has arrived. They state that in the midst of unprecedented AI infrastructure development by large enterprises and government departments worldwide, the core storage chip demand related to artificial intelligence training/inference systems dominated by NVIDIA Corporation's AI GPUs remains extremely robust, driving revenue growth in data center storage businesses, including HBM storage systems, server-level DDR5, and enterprise-level HDD/SSD. Following a series of positive catalysts released by Jensen Huang at the GTC conference and major signals from companies like Microsoft, Alphabet, and Meta continuing to invest heavily in AI computing infrastructure, the global AI chip industry has entered a long-term bullish market atmosphere. NVIDIA Corporation, the "AI chip superpower," has surpassed and consolidated its market capitalization at $5 trillion, becoming the first company in the world to reach that milestone. At the GTC conference on Tuesday, Jensen Huang announced that the next five quarters' data center revenue for NVIDIA Corporation would exceed $500 billion, driven by the Blackwell and next-generation Rubin architectures. Morgan Stanley states that SK Hynix, the largest supplier of HBM and leader in enterprise SSD storage systems, signaling that storage capacity supply will become even tighter. Consequently, the continuous increase in storage chip prices is expected to last throughout 2026, potentially extending to 2027. The growth prospects in the global storage chip sector are closer to the super-cycle benchmark of 2017-2018. Nomura and other Wall Street giants predict that meaningful growth in storage chip production capacity and actual storage product output acceleration across the entire storage industry will not occur until the mid to later 2027, leading to several years of a supply-demand imbalance.