South Korea’s 60% export surge is pulling billions from crypto

Preliminary data released Monday showed South Korea’s exports climbed 60.4% from a year earlier for the first 20 days of June. So far, adjusted exports surged nearly 50%, almost matching May’s hot pace of 52.6%.

The surge, driven largely by artificial intelligence (AI) demand, has not only elevated the country’s trade surplus but is also increasingly drawing investor money away from risk assets like cryptocurrencies.

Recent trade data shows South Korea’s exports climbing at some of the fastest rates in modern history. The nation’s exports have totaled $62 billion, up from $38.6 billion in the same period of 2025, according to customs data.

At the center of this export explosion is South Korea’s semiconductor industry. Memory-chip exports have surged on the back of global AI infrastructure spending, with major producers like Samsung Electronics and SK Hynix benefiting from record global demand.

The latest findings in South Korea also show imports reaching $44.5 billion (up 23.2%), yielding a trade surplus of $17 billion.

What do South Korean authorities think of the semiconductor boom?

Strong global spending on AI and data centers is keeping export demand high. This data shows once again that chip sales are anchoring South Korea’s growth and balancing out weaker sectors.

Semiconductor shipments outperformed all other sectors, rising 188.4% year over year. South Korea earned up to $25.5 billion from just chips. Computer product exports surged 293.3%, while oil shipments were lifted by high energy markets.

Samsung and SK Hynix still dominate production of the high-bandwidth memory (HBM) chips that power AI data centers for tech giants from Microsoft to ByteDance.

Policymakers are weighing the systemic impacts of a sustained semiconductor boom that has revitalized growth, tax revenue, and asset markets. However, a weaker won and high oil prices have pushed the central bank to take a more hawkish stance. According to Governor Shin Hyun Song, the benefits of the semiconductor surge are finally reaching the wider economy through higher profits, spending, and investment.

He warned that the chip boom could complicate inflation, as massive tech bonuses might drive up wages and consumer spending. Since inflation hit a two-year high of 3.1% in May, the BOK is leaning even more toward tightening.

Meanwhile, other geographic data highlights robust demand, with exports to China expanding 86.9% to $13 billion and U.S. demand rising 53.9% to $11.4 billion. Trade with Vietnam and the European Union also increased by 75.5% and 13.6%, respectively.

JP Morgan warns that the semiconductor industry has become highly jammed

However, more recently, JPMorgan’s quant team notes that the semiconductor trade has become incredibly crowded, making it highly susceptible to abrupt pullbacks due to mounting volatility.

Analyst Nikolaos Panigirtzoglou stated in a Thursday note that the combination of high exposure and volatility means more frequent market shocks for semiconductors, underscoring how quickly positions can unravel based on early June data.

JPMorgan noted that the chip sector’s rapid growth in major stock indexes has raised significant structural concerns. First is the concentration risk. Because semiconductor stocks now dominate major indexes, Panigirtzoglou noted that funds with strict risk limits might be forced to sell systematically when those limits are reached.

Moreover, the bank noted that the ratio of chip stocks’ market value to their revenues has climbed to more than 6 times. That is more than double the same measure for the Magnificent Seven, comparing Broadcom instead of Tesla.

JPMorgan also warned about a near-term technical risk: quarter-end portfolio rebalancing. The bank expects June adjustments to trigger $165 billion in stock dumping and bond purchases, which could spike volatility if semiconductor stocks fall.

Additionally, the bank flagged cryptocurrency markets as a potential weak spot, noting that many bitcoin mining operations appear to be operating on thin margins and are increasingly dependent on stable bitcoin prices.

Although the bank refrained from forecasting an imminent market correction, it cautioned that dense positioning, stretched valuations, and elevated volatility are setting the stage for more severe and frequent semiconductor pullbacks.