South Korea's current account surplus eyes $50b monthly milestone as semiconductor prices soar

A surge in semiconductor prices is being credited as the main driver behind South Korea's current account surplus staying above $40 billion for three consecutive months. In August, semiconductor export volumes rose nearly 10 percent while prices more than doubled, pushing the monthly surplus to the second-highest level ever recorded. The Bank of Korea said the strong momentum carried into September, raising the prospect that the monthly surplus could surpass the all-time record of $49.73 billion set in June and break the $50 billion mark for the first time. The cumulative surplus for January through August reached $279.2 billion — more than double last year's full-year surplus of $123.1 billion — and analysts say the annual figure could comfortably exceed the Bank of Korea's forecast of $450 billion if the trend holds.

Yu Seong-uk, head of the Bank of Korea's financial statistics department, said at a briefing Thursday on the preliminary balance-of-payments data for August 2026 that the August current account surplus widened from the previous month, driven mainly by the goods balance, even as seasonal quarterly dividend payments weighed on the primary income account. "Goods exports surpassed $100 billion on the back of strong semiconductor exports, and the services balance also improved," he said.

Semiconductor exports again led the August surplus. Sustained demand for AI infrastructure — fueled by capital spending expansions by global hyperscalers such as Google and Amazon — kept orders elevated. According to the Ministry of Trade, Industry and Energy, semiconductors accounted for $46.65 billion, or 47 percent, of total exports of $98.25 billion in August. Semiconductor exports have exceeded $40 billion for three consecutive months.

Price gains were the primary engine of that growth. "Semiconductor export prices rose more than 100 percent in August," Yu said. "Volumes also increased by close to 10 percent."

The surplus is expected to widen further in September. The Ministry of Trade, Industry and Energy said September exports reached $120.94 billion, up 83.5 percent from a year earlier — surpassing $120 billion for the first time in history and setting a new all-time monthly record for the third time in three months. "Customs exports came in very strongly in September, so September should also be good," Yu said.

The annual target of $450 billion is also coming increasingly into view. The Bank of Korea raised its full-year surplus forecast to $450 billion in its revised economic outlook in August, up $200 billion from its earlier projection of $250 billion. At the July balance-of-payments briefing, the central bank said a monthly average surplus of around $43 billion over the remaining five months of the year would be enough to hit the target — and August's surplus of $46.11 billion exceeded that threshold. With the cumulative surplus through August at $279.2 billion, the remaining four months need to average only around $42.7 billion per month. Given that September is expected to produce an even larger surplus, the odds of hitting the annual target have grown.

"Of the annual $450 billion forecast, $259 billion was projected for the second half," Yu said. "Looking at the current account through August, the trajectory is broadly in line with that outlook. In September, the trade balance appears to be running well above expectations, and there is also a year-end export concentration effect, so I think we can achieve the forecast level."

He added, however, that large-scale dividend payments are scheduled under corporate shareholder return policies in the fourth quarter, and that dividends from companies with high foreign ownership could be recorded as outflows in the primary income account. "We will need to monitor that," he said, also citing rising oil price volatility stemming from the ongoing conflict in the Middle East as a downside risk.

Despite the record-breaking current account surpluses, South Korea's stock market has struggled. The Kospi climbed to the 9,000 level in June before tumbling to 5,593.6 on July 30. It has since recovered partially but continues to hover around the 7,000 mark. The sharp swings have prompted some market participants to raise concerns about an AI bubble.

Experts say, however, that the scale of the current account surplus shows the South Korean economy is far from a crisis. A key indicator is the won-dollar exchange rate. Even as the Kospi fell sharply and traded sideways, the won has been on a sustained strengthening trend against the dollar. According to the Bank of Korea, the monthly average won-dollar rate — based on weekly closing prices — fell steadily from 1,528 won in June to 1,488.9 won in July, 1,404.4 won in August and 1,358.8 won in September. That is the opposite of what typically happens during an economic crisis, when a plunging stock market drives up demand for the safe-haven dollar and weakens the won. Analysts say the stock market decline therefore cannot be read as a crisis signal. If share prices have fallen without an underlying crisis, the most likely explanation is that inflated expectations for certain sectors are being unwound — a correction that tends to resolve more quickly than a fundamental economic downturn.

Oh Geon-young, head of the Pathfinder unit at Shinhan Bank, said at the Herald Money Festa 2026 on Friday that a falling stock market and a rising dollar represent a correlation, while a crisis causing the dollar to rise is a causal relationship. "When a crisis hits, stocks plunge and the dollar rises — but a falling stock market does not necessarily mean the dollar will rise," he said.

He added that a current account surplus of $100 billion a year used to be considered an A-plus result, but the cumulative surplus through July this year had already reached $230 billion. "That tells you semiconductor prices are rising far faster than oil prices," he said.