SEOUL, South Korea — South Korea is rapidly closing the gap with Taiwan in one of Asia’s most closely watched economic indicators, as a historic semiconductor boom powered by artificial intelligence pushes the country’s exports and current-account surplus to new heights.
Global investment banks have sharply raised their forecasts for South Korea’s current-account surplus as a share of gross domestic product, with some analysts now expecting the country to overtake Taiwan this year.
The big question: Can South Korea’s AI-driven chip boom finally push it ahead of Taiwan?
Korea’s Economic Surge Is Getting Harder to Ignore
According to the Korea Center for International Finance, the average forecast from eight major foreign investment banks for South Korea’s current-account surplus rose to 16% of GDP in August, up from 14.7% in July.
The forecasts reflect growing confidence in South Korea’s semiconductor industry as global companies pour billions into artificial intelligence infrastructure.
Among the most bullish forecasts:
- Nomura: 19.7% of GDP
- Goldman Sachs: 18.7% of GDP
- Citi: 18.2% of GDP
Meanwhile, seven investment banks forecast Taiwan’s current-account surplus at an average of 20.6% of GDP for 2026.
When comparing forecasts from six banks that issued projections for both economies, South Korea’s average stood at 18.1%, compared with Taiwan’s 21.5%.
That gap is dramatically smaller than last year’s estimates, when the same group projected South Korea at 7% of GDP and Taiwan at 17.5%.
One major investment bank, JPMorgan, is even more optimistic about South Korea’s chances, forecasting that the country could move ahead of Taiwan with a current-account surplus equivalent to 18.1% of GDP, compared with 13% for Taiwan.
The AI Chip Boom Is Changing the Numbers
The rapid narrowing of the gap is being driven largely by one industry: semiconductors.
Global demand for AI servers, advanced memory and data-center infrastructure has fueled a massive increase in South Korean chip exports.
South Korea’s semiconductor exports reached $281.2 billion from January through August, soaring 169.6% from a year earlier and accounting for about 40.6% of the country’s total exports.
The momentum was especially strong in August.
South Korea’s overall exports jumped 68.7% year-on-year to $98.25 billion, while semiconductor exports surged 209% to $46.65 billion, according to official trade data and Yonhap reporting.
Chip exports have now topped $40 billion for three consecutive months.
The Ministry of Trade, Industry and Resources said the continued growth was supported by strong demand from major technology companies expanding AI infrastructure around the world.
Korea Has Already Broken Last Year’s Export Record
South Korea’s export machine has moved so quickly that cumulative overseas shipments have already exceeded the country’s total export record for all of last year.
As of early September, cumulative exports reached $709.4 billion, surpassing the previous annual record of $709.3 billion.
If the current pace continues, South Korea could reach an extraordinary milestone: $1 trillion in annual exports for the first time.
Reuters reported that the surge has been driven largely by booming global demand for AI-related semiconductors, with South Korean technology giants benefiting from higher chip prices and intense demand for advanced memory products.
Samsung and SK hynix Ride the AI Wave
South Korea’s semiconductor industry is dominated by major global players including Samsung Electronics and SK hynix, both of which are benefiting from the rapid expansion of AI computing.
Demand for high-performance memory chips — particularly those used in AI data centers and advanced computing systems — has become a major driver of South Korea’s export growth.
The AI investment boom has also created a wider ripple effect across Asian manufacturing.
Reuters recently reported that factory activity across several Asian economies strengthened in August as demand for AI hardware and semiconductors boosted manufacturing activity.
Taiwan, however, remains a semiconductor powerhouse in its own right, led by the world’s largest contract chipmaker, TSMC.
Taiwan’s technology industry continues to benefit from strong global demand for advanced chips used in AI systems, smartphones and high-performance computing.
Why the Korea-Taiwan Comparison Matters
The current-account surplus measures a country’s transactions with the rest of the world, including trade in goods and services as well as income and transfers.
Looking at the surplus as a share of GDP makes it easier to compare economies of different sizes.
For South Korea, a current-account surplus approaching 20% of GDP would be unprecedented in modern economic history.
The country’s previous high was 10.1% in 1998, during the aftermath of the Asian financial crisis.
But analysts say the current situation is fundamentally different.
Rather than being caused by a sharp economic contraction, South Korea’s rising surplus is being fueled by stronger exports, improved terms of trade and the soaring value of semiconductor shipments.
That distinction could prove crucial as policymakers and investors assess whether the current boom is sustainable.
Taiwan Is Still Ahead — But the Race Is Tightening
Taiwan continues to hold an advantage in the overall current-account-surplus comparison, supported by its powerful technology sector and global semiconductor dominance.
But South Korea’s recent momentum has dramatically changed the picture.
Taiwan’s major electronics manufacturers are also benefiting from the AI boom. Foxconn recently said strong demand for AI-related products was expected to support better-than-expected third-quarter performance, underscoring how AI investment is reshaping technology supply chains across the region.
Taiwan President Lai Ching-te has also highlighted the island’s semiconductor industry as a key pillar of its role in the global technology economy.
Still, South Korea’s latest export numbers suggest that Taiwan can no longer assume its lead will remain untouched.
The Bigger Question: Can the Chip Boom Last?
The race between South Korea and Taiwan is increasingly becoming part of a much larger battle for dominance in the global AI supply chain.
Both economies are deeply connected to the technologies powering artificial intelligence.
Taiwan dominates advanced contract chip manufacturing.
South Korea is a global leader in memory semiconductors, including advanced chips essential for AI systems.
For now, South Korea’s numbers are accelerating at a remarkable pace.
But the country’s ability to maintain its momentum will depend heavily on whether global AI investment remains strong, semiconductor prices stay elevated and chipmakers continue expanding production.
With exports already breaking records and the current-account-surplus gap narrowing fast, one thing is becoming increasingly clear:
South Korea’s semiconductor boom is no longer just an export story — it is reshaping the balance of economic power in Asia.
And if the AI chip frenzy continues, Taiwan’s long-held lead could soon face its biggest challenge yet.
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