South Korea Q2 GDP Beats Forecasts on AI Chip Demand
South Korea’s economy expanded faster than expected in the second quarter of 2026. Strong semiconductor exports supported growth as rising investment in artificial intelligence increased global demand for advanced memory chips.
Economic Growth Exceeds Expectations
South Korea’s gross domestic product grew by 3.7% year-on-year during the three months ending June 30, according to government data released on Thursday.
The result exceeded market expectations of 3.5%. However, annual growth eased slightly from the 3.8% recorded in the first quarter of 2026.
On a quarterly basis, GDP increased by 0.6%. This was also stronger than the forecast growth rate of 0.4%.
Semiconductor Exports Drive South Korea’s Economy
Exports were the main driver of economic growth during the quarter. The global artificial intelligence boom continued to increase demand for South Korea’s advanced semiconductor products.
Major memory chip manufacturers Samsung Electronics and SK Hynix were among the leading beneficiaries. Both companies have gained from growing demand for the high-performance memory chips used in AI data centres and advanced computing systems.
Middle East Conflict Creates Economic Pressure
Strong semiconductor exports helped South Korea withstand continued economic disruption linked to the conflict in the Middle East.
However, several domestic challenges limited growth. Private spending slowed, while weakness in the property market continued to weigh on economic activity. These pressures contributed to the slight slowdown compared with the previous quarter.
AI Boom Supports South Korea’s Growth Outlook
Despite these challenges, the latest GDP figures showed that South Korea’s economy maintained solid momentum.
Asia’s fourth-largest economy continues to benefit from the global AI investment boom, which has strengthened semiconductor demand and supported the country’s major chipmakers.
