South Korea's export price index surged 46.9% year on year in May on a Korean won basis, accelerating sharply from a revised 41.3% gain in April, according to preliminary data from the Bank of Korea on Tuesday.
The rally in semiconductor-linked products pushed the headline index to its sharpest increase since March 1998.
On a month-over-month basis, the export price index inched up 0.3%, easing from the 7.5% gain recorded in April, suggesting the pace of monthly increases is stabilizing.
On the import side, prices rose 24.8% from a year earlier, also accelerating from April's revised 20.5% increase. While prices edged down 0.3% from the prior month, the pace of drop eased from the 2.1% monthly decline in April.
The sustained drop in import prices on a monthly basis, combined with the widening in export price gains, helped push South Korea's net barter terms of trade (NBTT) index up by 18.7% from a year earlier.
The latest print was up from 14.3% in April, extending a streak of improving purchasing power for Korean exporters.
The NBTT measures the quantity of imports that can be purchased per unit of exports relative to the 2020 base year.
The export price acceleration was driven by a double-digit jump in export prices of agricultural, forestry and marine products, as well as manufacturing products.
Within the manufacturing cluster, export prices of computers, electronic and optical equipment soared 104% year over year in May, driven by a boom in semiconductor products. The category accounts for 29% of overall export prices.
South Korea recently reported that trade surplus hit an all-time high in May, boosted by strong chip exports that pushed overall shipments to their fastest growth in four decades.
Semiconductor exports alone surged 169% to $37.2 billion during the month, led by capital investments by US tech companies. ING noted that chip exports accounted for 42.3% of South Korea's overall exports in May.
Strong demand for chips recently translated into surging equity valuations for South Korea's tech giants, with SK Hynix (KRX:000660) joining the $1 trillion market capitalization club for the first time alongside rival Samsung Electronics (KRX:005930).
"Market sentiment appears to be shifting toward the view that the semiconductor upcycle will last longer than previously expected," BNP Paribas economist Jeeho Yoon was quoted by Bloomberg as saying recently.
