SEOUL — Goldman Sachs has told clients that the artificial-intelligence capital expenditure boom is driving South Korea’s chip cycle harder and longer than the bank expected, and that the resulting trade surplus will last through the end of the year. The bank now forecasts that Korean exports will exceed $1 trillion for the year and that the current account surplus will rise to about 15% of gross domestic product.
The forecast arrives at a delicate moment. It was published in the same week the Korean stock market suffered its worst session in years, with the KOSPI halting twice in a day and the country’s two largest companies falling by double digits. The Goldman note is a counterweight to the market’s panic: the bank is saying that the real economy’s AI windfall remains intact even as the stock market reprices the companies that benefit from it.
The numbers describe an economy transformed by AI demand. Semiconductors have long been Korea’s largest export category, but the current cycle is different in kind, according to the bank’s analysts: the demand for memory, both high-bandwidth memory for AI accelerators and commodity DRAM for servers, has pushed prices and volumes up at the same time. The result is a trade surplus that has widened every month this year.
The bank’s revision is notable because it had already expected a strong cycle. Goldman’s earlier forecasts called for solid Korean export growth driven by chips, and the new projections represent an upgrade on both the level and the duration of the boom. The analysts cited data on memory pricing, capacity utilization and order books, and they said the cycle’s strength has surprised even the optimists on their own team.
The current account math is the most striking part. A surplus of 15% of GDP would be among the largest in the world for a major economy, comparable to the peaks reached by oil exporters during commodity booms. The figure reflects both the scale of chip exports and the relative weakness of other import categories, and it has implications for the won, which would face upward pressure from the influx of dollars.
The forecast has policy consequences. The Bank of Korea has been weighing the timing of rate cuts, and a current account surplus of this size complicates the calculus: a strong won makes imports cheaper and dampens inflation, but it also pressures exporters outside the chip industry. Government officials have warned about the economy’s dependence on a single product category, and the Goldman forecast gives those warnings a sharper edge.
The concentration risk is the flip side of the boom. Chips now account for a larger share of Korean exports than at any point in the country’s history, according to trade data, and the semiconductor cycle has a history of turning abruptly. The memory industry’s capacity discipline has extended the current upcycle, but every memory boom has eventually produced a bust, and the surplus that looks like strength today would amplify the pain of a downturn.
The stock market and the real economy have begun to tell different stories. The KOSPI’s decline this week was driven by valuations, which had priced in several more years of growth; the Goldman forecast is about actual shipments, which continue to rise. The gap between the two is the central investment question of the moment: whether the market is anticipating a slowdown that the trade data has not yet shown, or correcting a bubble that the fundamentals will eventually justify.
The export numbers support the forecast so far. Korea’s monthly exports have set records in each of the past several months, driven by memory shipments that have risen in both price and volume, and the trade data has become the most watched indicator in the country, moving markets and currency alike. The semiconductor industry’s capacity additions, which are now under construction at SK Hynix, Samsung and their suppliers, are expected to come online over the next two years, and Goldman’s forecast assumes that the demand for their output will still be growing when they do. The bank’s analysts have been among the most bullish on the AI cycle, and their willingness to raise the forecast again suggests that even the optimists are being surprised by the scale of the boom.
The risks to the forecast are the same ones that have ended every memory boom. A slowdown in AI capital spending would hit Korea’s exports harder than any other economy’s, because no other country has concentrated its industrial base so completely around a single product category. The capacity that is now being planned could arrive just as demand softens, and the surplus that the Goldman forecast celebrates would flip into the deficit that followed every previous cycle. The bank’s analysts acknowledged the risk and said their forecast is for the current year, not a prediction of the next decade, but the market’s reaction to the KOSPI’s two circuit breakers suggests investors are already pricing the downside. The tension between the record exports and the plunging stock market is the defining feature of the Korean economy right now, and it will be resolved by the same force that created it: the demand for memory, which has made the country rich and could, one day, make it vulnerable.
The bank’s clients are being told to prepare for a prolonged cycle. Goldman’s analysts said the AI boom’s impact on Korea is being underestimated on both the upside and the downside, and that the country’s economic numbers will keep surprising until the capacity that is now under construction comes online. For a country that built its modern economy on memory chips, the AI era has delivered a second wind, and the forecast says the wind is not expected to die down this year.
