Seoul:South Korea has shown a strong capability to adapt to changes in global trade, bolstered by record exports, leadership in semiconductors, and expanding commercial and security partnerships.

According to Qatar News Agency, Qatar National Bank (QNB) highlighted in its weekly report that Seoul is diversifying its trade relations beyond China, focusing significantly on Southeast Asia. The nation’s growing defense industry is also contributing to new revenue streams and enhancing its position in global markets.

In June, South Korean exports surpassed $100 billion for the first time, marking a 70.9% year-on-year increase, largely driven by semiconductor shipments and solid-state drives. Information and communications technology exports accounted for more than half of the country’s total exports for the first time. Overall, South Korea’s exports reached a record $709.7 billion last year.

QNB attributed a significant portion of this growth to the increasing demand for memory chips used in artificial intelligence applications, an area where South Korea is a leading global supplier. Despite this growth, the bank warned of challenges such as changing trade relationships with China, efforts to reduce economic interdependence, and intensifying competition in the memory-chip market.

South Korea is at a strategic crossroads, deciding between maintaining its status as an export-driven chip supplier or becoming a more influential player in shaping global supply chains, particularly in critical industries like artificial intelligence and technology. QNB noted that Seoul is aiming to pursue both strategies.

Samsung Electronics and SK Hynix account for about 73% of the global market for high-bandwidth memory chips, which are essential for computers, smartphones, and data centers supporting artificial intelligence. However, QNB cautioned that South Korea’s reliance on a narrow range of exports makes it vulnerable to global trade disruptions and heightened competition. The country’s trade surplus with China decreased from nearly $100 billion in 2018 to $20 billion last year, as China expanded domestic alternatives in electronics, electric vehicles, and batteries.

South Korea has bolstered its strategic partnership with the United States through a landmark trade and security agreement established in early 2026. This agreement reduced US tariffs on South Korean goods from 25% to 15%, while South Korea committed to $350 billion in US investments, including $150 billion for the American shipbuilding industry. The deal also supports South Korea’s ambitions to develop nuclear-powered submarines, seen as crucial for its long-term security.

Moreover, South Korea is increasing its defense exports and exploring new markets in Southeast Asia, where Korean companies have established extensive manufacturing operations and integrated into regional supply chains. However, trade tensions persist, as evidenced by the United States’ investigation into South Korean manufacturing practices in March, highlighting ongoing challenges in the bilateral relationship.