The economic growth of South Korea is slowing down, but chip exports are still the main driving force for growth.

After achieving strong growth in the first quarter, South Korea's economy slowed down in the second quarter. However, thanks to strong performance in chip exports offsetting weak private consumption and construction investment, the country's economy still maintains resilience. Preliminary data released by the Bank of Korea on Thursday showed that South Korea, as the fourth largest economy in Asia, grew by 0.6% in the second quarter compared to the previous quarter, following a revised 1.8% growth in the first quarter. Compared to the same period last year, the economy grew by 3.7% in the second quarter, slightly lower than the revised 3.8% growth in the previous quarter. The latest GDP data exceeded market expectations. Economists surveyed by the media had predicted that GDP would grow by 0.4% quarter-on-quarter and 3.4% year-on-year in the second quarter. Against the backdrop of a surge in demand for semiconductors driven by the artificial intelligence boom, exports remain the main growth engine. South Korea, home to storage chip manufacturers Samsung Electronics and SK Hynix, has emerged as a major beneficiary in the global AI infrastructure construction boom. In the second quarter, chip and machinery exports, as well as investments in research and development and software development, maintained steady growth, but private consumption slowed down and construction investment contracted. Despite a slight slowdown in economic growth momentum in the second quarter, analysts and policymakers remain optimistic about the growth prospects led by exports for the remainder of the year.