Semiconductors and Shipbuilding Drive Export Sentiment Rebound in Q4 After a Year

Amid expectations of robust semiconductor exports, the export business sentiment among Korean companies for the fourth quarter has turned positive for the first time in a year. Although some sectors, such as automobiles, are expected to underperform due to the burden of U.S. tariffs, the outlook for exports has brightened, especially for semiconductors and ships.

According to a survey released by the Korea International Trade Association on September 25, the Export Business Survey Index (EBSI) for the fourth quarter (October to December) was recorded at 101.4. This is the first time since the fourth quarter of last year (103.4) that the index has exceeded the baseline of 100. The EBSI survey was conducted on 1,013 export companies nationwide from August 25 to September 8.

In the detailed categories, export prices (111.5), export consultations and contracts (111.1), and facility operation rates (104.3) showed improvement. On the other hand, import regulations and trade friction (83.7) and manufacturing costs (86.8) were areas of concern, with potential for deterioration.

Out of 15 product categories, six-including semiconductors (145.8), wireless communication devices and components (119.2), and ships (110.3)-are expected to improve. Semiconductors have set new monthly records for five consecutive months since April, driven by the recovery in memory prices and strong demand for artificial intelligence (AI) semiconductors. The shipbuilding sector also reflected expectations for the "MASGA (Make American Shipbuilding Great Again)" project, which was promoted during the Korea-U.S. trade negotiations.

Nine product categories, including automobiles and auto parts (69.3), plastics, rubber, and leather products (62.4), are expected to underperform. In particular, the automobile sector continues to face a 25% tariff as follow-up discussions after the Korea-U.S. trade negotiations have been delayed. Japan, since September 16, has benefited from a reduced 15% tariff, giving it a competitive advantage. The United States has also finalized a 15% tariff on European automobiles and parts, retroactively applied from August 1.

The main difficulties cited by companies were rising raw material prices (15.7%), sluggish economies in export destinations (14.2%), buyers’ demands for price reductions (12.8%), and import regulations (12.5%).

Meanwhile, according to the Ministry of Trade, Industry and Energy, Korea’s total automobile exports in August reached a record $5.5 billion for the month of August, but exports to the United States declined by 15.2%, marking a decrease for the sixth consecutive month.

This content was produced with the assistance of AI translation services.