South Korea Q2 GDP beats forecasts on chip export surge

South Korea's economy grew faster than expected in the second quarter, powered by semiconductor exports that have become the main driver of activity in Asia's fourth-largest economy.

Gross domestic product expanded 0.7% quarter-on-quarter in the three months through June, the Bank of Korea said Thursday. That topped the 0.5% median estimate in a Bloomberg survey of economists. From a year earlier, GDP rose 2.9%, also above the 2.5% forecast.

The export sector led the gain. Semiconductor shipments surged, reflecting sustained global demand for memory chips used in AI data centers and high-performance computing. Net exports contributed 1.3 percentage points to quarterly growth, the central bank said.

Domestic demand was weaker. Private consumption edged up 0.2% from the previous quarter, while construction investment fell 0.3%. The BOK has held its policy rate at 3.50% since January 2023, and the tepid household spending data may reinforce expectations for a cut later this year.

Samsung Electronics and SK Hynix, the world's two largest memory-chip makers, are the primary beneficiaries of the export boom. Samsung shares rose 1.8% in Seoul trading Thursday after the GDP print. SK Hynix gained 2.1%.

Infosys and Wipro, Indian IT firms with exposure to semiconductor-adjacent services, saw limited direct impact from the Korean data. INFY stock page carries an Alpha Score of 57, labeled Moderate, while WIT stock page scores 46, labeled Mixed.

The BOK now forecasts full-year 2025 GDP growth at 2.4%, revised up from 2.1% in May. The next policy meeting is Aug. 22.