South Korea’s Trade Reliance Rose in 2024 as Chip Industry Rebounded

South Korea’s economy became more reliant on trade in 2024 as a recovery in the semiconductor industry lifted exports and reshaped the country’s industrial transaction structure, according to data released by the Bank of Korea on Monday.

The central bank’s industrial input-output analysis showed that total industrial transactions increased 4.6 percent from a year earlier to 7,113.6 trillion won, equivalent to about $5.13 trillion. The measure captures transactions across the economy and provides a broad view of how domestic production, imports and overseas trade contributed to industrial activity.

Domestic output represented 85 percent of total industrial transactions, slipping 0.1 percentage point from the previous year. Imports accounted for the remaining 15 percent, rising by the same margin. While that change was modest, the share of transactions connected to external trade moved more sharply.

Exports and imports together accounted for 31.1 percent of total transactions in 2024, up 1.5 percentage points from a year earlier. The increase was driven primarily by stronger outbound shipments, underlining the importance of overseas demand to South Korea’s manufacturing-led economy.

The Bank of Korea linked the shift to the semiconductor sector’s rebound from its 2023 downturn. A central bank official said the strong recovery in chips had a significant effect on the overall structure of the economy. Semiconductors are one of South Korea’s largest export industries and play a central role in production networks that connect local suppliers with global technology markets.

The figures indicate that the rebound did more than raise headline export totals. It also increased the weight of cross-border activity within the wider flow of goods and services measured across industries. That makes the economy more sensitive to changes in global technology demand, trade conditions and supply chains, even as stronger chip shipments support production and national income.

The slight rise in the import share also reflects the interconnected nature of manufacturing, where production frequently depends on energy, raw materials, equipment and components sourced from overseas. The 2024 data therefore show both sides of South Korea’s trade exposure: exports can provide a powerful boost when global demand strengthens, while a high level of external dependence can leave domestic activity more exposed to international disruptions.

For policymakers, the report provides a structural view of the economy after the semiconductor slump and recovery. The larger external share confirms that trade remained a major engine of activity in 2024, with the chip cycle exerting an outsized influence on the country’s industrial performance.