Korea's export boom masks widening gap between large, small firms

Korea’s exports surged more than 70 percent in the third quarter from a year earlier, but much of the growth was concentrated among a handful of large corporations, widening the gap between major exporters and smaller businesses, government data showed Tuesday.

While shipments soared, the number of exporting firms remained virtually unchanged, suggesting that the benefits of the export boom have yet to spread across the business sector.

According to preliminary trade statistics released by the Ministry of Data and Statistics and the Korea Customs Service, exports jumped 72.3 percent year-on-year to $318.6 billion in the third quarter. Imports rose 25 percent to $203.1 billion.

Export growth accelerated from 38.4 percent in the first quarter of this year and 57.2 percent in the second.

“Driven by the semiconductor sector, export value and export growth reached record highs,” a ministry official said.

However, the figures revealed a stark disparity in export performance by company size.

Exports by large corporations more than doubled to $248.6 billion, up 103.5 percent from a year earlier. In contrast, exports by medium-sized companies rose 12.8 percent to $36.9 billion, while those by smaller enterprises increased 10.7 percent to $32.7 billion.

The export growth rate for large corporations was nearly 10 times that of smaller firms.

The concentration of exports among a handful of companies also intensified.

The top 10 exporters accounted for 60.9 percent of total shipments, up 20.3 percentage points from 40.5 percent a year earlier. Their share climbed from 50.1 percent in the first quarter to 55.3 percent in the second.

The top 100 exporters accounted for 79.4 percent of shipments, up 11.5 percentage points year-on-year, meaning nearly 80 percent of Korea’s exports came from just 100 companies.

Despite soaring export value, the number of exporting firms edged up just 0.3 percent year-on-year to 69,988. Growth in the number of exporters slowed from 2.5 percent in the first quarter and 2 percent in the second.

The disparity was also evident across industries.

Exports of electrical and electronic products, including semiconductors, soared 143.6 percent to $206 billion, while shipments of transportation equipment declined 1.2 percent.

Concerns over Korea’s reliance on semiconductors were also reflected in the country’s economic outlook for next year.

The Korea Institute of Finance projected Tuesday that the economy would grow 3.1 percent in 2027, supported by strong semiconductor exports. Although down from an estimated 3.8 percent this year, growth is expected to remain robust, driven by expanding facility investment and recovering private consumption.

However, the institute cautioned that heavy dependence on semiconductors could leave the economy vulnerable to shifts in artificial intelligence (AI) investment, with any slowdown potentially affecting exports, investment and consumption.

“The recovery is expected to remain uneven across sectors despite projected growth of 3.1 percent in 2027,” said Kim Hyun-tae, head of the institute’s macroeconomic research division. “A potential sharp decline in semiconductor demand, triggered by a reassessment of AI profitability or delays in data center investment, could deal a blow not only to exports and investment but also to consumption.”