Semiconductor boom drives record current-account surplus, pushing annual outlook past $450b

South Korea's current-account surplus surpassed $60 billion for the first time in September, as a surge in semiconductor exports coincided with the quarter-end effect. With the cumulative surplus for the first nine months of the year already exceeding $340 billion, the full-year figure could approach $500 billion — well above the Bank of Korea's existing forecast of $450 billion. The central bank is weighing how much to raise its growth and current-account surplus projections in its revised economic outlook on Nov. 26, but the heavy concentration of export gains in semiconductors and the high dependence on price increases remain sources of concern.

Kim Young-hwan, director general of the BOK's Economic Statistics Department, said at a briefing Thursday on the preliminary balance of payments for September 2026 that the monthly current-account surplus had exceeded $60 billion for the first time, setting a new all-time record for the third time in three months. "The year-on-year increase was $47.2 billion and the month-on-month increase was $15.3 billion — both all-time highs," he said. He added that the September surplus alone accounted for half of last year's full-year surplus, which had been the largest annual figure on record, and that the third-quarter surplus also surpassed last year's full-year total.

Semiconductors were the engine behind the record surplus. According to the Ministry of Trade, Industry and Resources, semiconductor exports reached $60.3 billion in September, up 262.8 percent from a year earlier — the first time a single product category has exceeded $60 billion in monthly exports. Exports excluding semiconductors also rose 23 percent to $60.6 billion. On a customs-clearance basis, IT-sector exports grew 195.8 percent while non-IT exports rose 13.4 percent.

The likelihood of the full-year surplus exceeding the BOK's forecast has grown. The cumulative current-account surplus for January through September stood at $340.66 billion. The third-quarter surplus alone came to about $150 billion, already covering 58 percent of the $259 billion second-half surplus the BOK projected in its August outlook. An average monthly surplus of about $36.5 billion over the remaining three months would be enough to hit the $450 billion annual target.

Under a simple projection, an average monthly surplus of $40 billion over the final three months would bring the full-year total to about $460 billion. Maintaining the recent three-month average of $49.9 billion would push the figure to around $490 billion. A monthly average of roughly $53.2 billion would carry the annual surplus past $500 billion.

However, foreign dividend payments tied to expanded shareholder-return programs by Korean companies at year-end could narrow the surplus. November, when quarterly securities investment dividends are concentrated, is seen as the first test. Volatility in global oil prices stemming from Middle East conflicts is also cited as a variable.

Kim said October's trade balance surplus shrank as exports fell and imports rose compared with September, but added that the current-account surplus for October appeared likely to rank second-highest on record. "There could be an effect of exports picking up as the year draws to a close," he said, while cautioning that dividends tied to shareholder-return policies would act as a drag on the surplus.

The BOK's revised economic outlook, to be released at the Monetary Policy Board meeting on Nov. 26, is also increasingly likely to show an upward revision to the growth path. BOK Governor Shin Hyun-song signaled as much at a press briefing last month, saying customs-clearance exports this year were expected to exceed the existing forecast of $1 trillion and the current-account surplus to surpass $450 billion.

Upward pressure on the growth forecast is also building. The BOK projected growth of 3.3 percent this year and 2.9 percent next year in its August outlook. But third-quarter real GDP expanded 1 percent quarter on quarter, far exceeding the BOK's projection of 0.3 percent. Even if fourth-quarter growth comes in flat, the full-year growth rate could reach 3.6 percent.

Major overseas institutions have also been raising their South Korea growth forecasts in succession. As of late October, the average 2026 growth forecast from eight major foreign investment banks stood at 3.7 percent, up 0.2 percentage points from a month earlier and 1.3 percentage points above the April estimate of 2.4 percent.

The BOK's concern is that the export boom rests heavily on semiconductors. According to the Ministry of Trade, Industry and Resources, semiconductors' share of total exports climbed from 31.2 percent in January to nearly half — 49.9 percent — in September. As total monthly exports rose by $55.1 billion from $65.8 billion in January to $120.9 billion in September, semiconductor exports surged by $39.8 billion, from $20.5 billion to $60.3 billion. That means 72 percent of the overall export increase came from semiconductors alone.

Kim said non-semiconductor exports grew 8 percent in 2024 and 3.8 percent in 2025, and that recent growth has far exceeded those rates. "Semiconductors are performing so strongly that there is a relative gap, but the non-IT sector is holding its own," he said.

The fact that the semiconductor boom is driven more by price than by volume is another source of concern. Kim noted that semiconductor prices rose 182.6 percent in September while volume increased 30.5 percent, saying price factors were playing a dominant role. Memory chips are a classic cyclical industry in which prices can swing sharply with shifts in supply and demand. Should prices turn, exports and the surplus could shrink rapidly.

Markets are already sending cautionary signals. In September, foreign investors net sold $13.74 billion worth of domestic shares, concentrated in large-cap semiconductor stocks. The BOK also flagged AI investment and semiconductor industry conditions as sources of uncertainty in the growth outlook in its economic assessment last month.