South Korea’s export machine delivered a striking signal on Sunday, with October shipments surging 93.7% year-on-year to a record $115.3 billion, according to Korea Customs Service data.
The country accumulated $930 billion in total exports during the first ten months of 2026, breaching the $900 billion threshold for the very first time in its history.
President Lee Jae Myung seized on that momentum Monday, telling the National Assembly that South Korea now stood within reach of $1 trillion in annual exports, with semiconductors leading the charge.
The record trade performance underpins what Lee presented as the country’s most ambitious budget yet, with total 2027 spending set to climb 12.8% to 820.9 trillion won, equivalent to roughly $610 billion.
At the heart of the plan is a 4.7 trillion won commitment to build a sovereign artificial intelligence model that Lee described as delivering “world’s highest performance,” placing Seoul in direct competition with the United States and China on foundational AI capabilities.
A further 21.3 trillion won has been earmarked for semiconductors, physical AI and AI data centres, a figure that nearly doubles the equivalent allocation from 2026 and signals the scale of industrial ambition behind the rhetoric.
The workforce strategy is equally striking, with the government pledging to train 2,000 specialists to “lead semiconductor design and the regional semiconductor industry,” alongside broader AI education programmes targeting students, job seekers and existing workers.
South Korea has also deepened its university “contract departments” model, through which students enrol in company-linked degree programmes offering direct recruitment pathways to employers including Samsung Electronics and SK Hynix before they graduate.
Defence spending will rise 8.2% to 73.3 trillion won, with Lee promising to “rapidly transform into a smart, elite, and powerful military by establishing a hybrid manned and unmanned system based on AI, robots, and drones.”
Increases in social security spending for younger citizens also feature in the package, broadening a budget that Lee insisted would result in “virtually no net increase in government debt,” with any new bonds issued solely to retire existing obligations.
The spending drive is backed by an economy gathering considerable pace, with the International Monetary Fund forecasting 3.3% growth for South Korea in 2026, its strongest rate since the post-pandemic rebound of 2021.
October’s trade figures reinforced that picture further, with a $42.5 billion surplus recorded for the month as imports rose 36% year-on-year to $72.8 billion, reflecting both domestic demand strength and surging inflows of components to feed the technology sector.
Global appetite for computing power, driven by the rapid expansion of AI applications worldwide, has been the primary engine behind South Korea’s semiconductor export boom throughout 2026.
Lee framed the entire budget as a moment of strategic commitment, calling on the government to “boldly invest in AI and future growth engines” as the country attempts to lock in its position at the centre of the global technology supply chain.