Think globally, act locally

As of the latest full-year official data, South Korea exports semiconductors the most. In 2025, Korea’s total exports reached a record USD 709.7 billion, and semiconductor exports were the largest category at USD 173.4 billion, making them by far the country’s top export item.

After semiconductors, South Korea’s other major export categories in 2025 were automobiles (USD 72.0 billion), general machinery (USD 46.9 billion), petroleum products (USD 45.5 billion), petrochemicals (USD 42.5 billion), ships (USD 31.8 billion), and steel (USD 30.3 billion). This shows that Korea’s export structure is led not only by advanced technology, but also by strong manufacturing, heavy industry, and industrial materials.

In practical terms, South Korea is strongest in products related to chips and electronics, vehicles and auto parts, industrial machinery, shipbuilding, chemicals, refined petroleum products, and steel-based industrial goods. Alongside these traditional export pillars, smaller but fast-growing sectors such as cosmetics and agri-fisheries/food products also contributed to export growth in 2025.

The latest monthly trend also points in the same direction. In February 2026, Korea’s semiconductor exports rose to USD 25.2 billion, again leading export growth among the country’s major export items.

South Korea has a high-income, industrialized, and export-driven economy with a strong foundation in advanced manufacturing, technology, and global trade. According to the World Bank, Korea’s GDP reached USD 1.88 trillion in 2024, with GDP per capita at USD 36,238.6. Korea is also a highly open economy: the IMF notes that exports account for around 40% of GDP, reflecting the country’s deep integration into global supply chains and international markets.

From a macroeconomic perspective, South Korea remains relatively stable, although growth slowed in 2025 before improving again in 2026. As of early 2026, official forecasts suggest 2026 real GDP growth of roughly 1.8% to 2.1%, depending on the institution: the Bank of Korea projected 2.0% in February 2026, the OECD projected 2.1% in December 2025, and the IMF projected around 1.8% to 1.9% in its late-2025 updates. Inflation has stayed close to the Bank of Korea’s 2% target, with the Bank of Korea projecting 2.2% CPI inflation for 2026, while the OECD likewise expects inflation to remain around target. The labor market has also remained resilient, with the World Bank showing 2.7% unemployment in 2025.

For businesses, Korea offers a particularly attractive environment in semiconductors, electronics, automotive, batteries, chemicals, and other high-tech industries. Invest Korea highlights Korea’s major strengths in semiconductors and displays, electrical and electronic products, automotive, secondary batteries, and hydrogen-related industries. Korea also has a broad FTA network in force with major markets including the United States, the European Union, ASEAN, RCEP members, and Türkiye, which strengthens market access for companies operating from or sourcing from Korea.

South Korea is also relatively open to foreign investors. Invest Korea states that FDI is permitted in 1,144 out of 1,205 business categories, a 99.7% liberalization rate, and that foreign investors generally receive national treatment, along with legal protections such as remittance guarantees. Korea also offers Free Economic Zones, industry-specific support, and incentives tied to investment, jobs, and R&D, which can be relevant for international manufacturers, regional headquarters, and technology-driven businesses.

That said, South Korea is not without challenges. The OECD and IMF both point to risks from trade-policy uncertainty, global supply-chain shifts, weak domestic demand, household debt, housing-related financial stress, and demographic pressures, especially population aging and very low fertility. The OECD also argues that further regulatory reform, stronger competition, and higher labor-force participation would help lift long-term growth. In other words, Korea offers a highly capable and reliable business environment, but companies still need to watch macro conditions and sector-specific policy changes closely.