Storage chip exports show strong momentum! South Korea's current account surplus in February reached a historic high.

Before the Middle East conflict began to have a chain impact on the energy market and global shipping, strong semiconductor chip exports around storage chips drove South Korea's merchandise trade surplus to expand in February, setting a record for the largest monthly current account surplus. According to data released by the Bank of Korea on Wednesday, South Korea's current account surplus reached $23.2 billion in February, marking the highest monthly record ever. Of this, the merchandise account alone recorded a surplus of $23.4 billion, also setting a record with exports increasing by nearly 30% year-on-year, much higher than the 4% growth in imports. These data reflect the economic situation in South Korea before the comprehensive impact of the Middle East conflict became evident. The Middle East war occurred around the end of February, so the international balance of payments data for that month may only reflect the limited impact of rising oil prices and more widespread supply chain disruptions, factors that have since exacerbated the risks faced by South Korea as a trade-dependent economy. Semiconductors continue to be the main driver of strong export growth in South Korea, largely benefiting from the strong demand for the DRAM/NAND storage chips of the two Korean semiconductor super giants Samsung Electronics and SK Hynix under the global AI frenzy. Boosted by continued global investments in artificial intelligence (AI) and data centers, South Korea's latest monthly chip exports in March surged by an unprecedented 151.4% year-on-year. The Bank of Korea stated that the sustained significant growth in exports was mainly driven by strong global demand for memory chips, with exports of information and communication equipment also continuing to expand. In contrast, exports of chemicals, machinery and precision equipment, and passenger cars turned negative. The services account remained in deficit, with a gap of $1.86 billion, mainly dragged down by travel and processing services; while the primary income account recorded a surplus of $2.48 billion, primarily from dividend income. The Bank of Korea stated that February marked the 34th consecutive month of current account surplus for South Korea, the second-longest continuous surplus record since the early 21st century. In terms of the financial account, net assets increased by $22.8 billion, with South Korean investors continuing to expand their overseas investment scale, while foreign investors reduced their holdings of South Korean domestic stocks.