OHMEGA/MONSTER

South Korea and Taiwan overtake Japan in first-half exports on AI chip boom

First-half figures are dollar-denominated and price-driven — high-bandwidth memory and Taiwan-packaged chips for Nvidia lifted Korea and Taiwan while Japan's upstream tools missed the surge, leaving the lead fragile to currencies, tariffs and a potential supply glut after 2028.

South KoreaTaiwanJapan

What happenedIn the first half of 2026 South Korea ($496.3bn) and Taiwan ($416.6bn) each exported more than Japan ($384.4bn) for the first time in the same half-year, driven by AI semiconductors.

Why it mattersA few AI products — high-bandwidth memory and Taiwan-packaged chips for Nvidia — now decide national export rankings, showing why Japan's strength in chipmaking tools missed the windfall and why the new lead is concentrated and exposed if AI spending cools.

Still openWhether the dollar-denominated, price-inflated first-half lead becomes a full-year structural shift or reverses with second-half seasonality, yen moves, US tariffs and a forecast memory glut from 2028-29.

a container port with stacked shipping containers and cranes at dusk
AI-generated illustration — not a photograph of this story

In the first half of 2026, South Korea exported $496.3bn worth of goods and Taiwan $416.6bn, each passing Japan's $384.4bn for the first time in the same half-year. The pass was driven by a concentrated AI semiconductor boom high-bandwidth memory and foundry-packaged chips for Nvidia and it is powerful but fragile: measured in dollars and inflated by chip prices, it may not survive a second-half swing in currencies, tariffs or memory supply after 2028.

The numbers come from a Nikkei analysis on August 7 of national trade statistics, Japan External Trade Organization and UN Comtrade data, now grounded in primary releases from South Korea's Ministry of Trade, Industry and Energy, Taiwan's Ministry of Finance and Japan's Ministry of Finance. South Korea led Japan by $111.9bn, Taiwan by $32.2bn. Both grew close to 50% year-on-year South Korea about 48.4%, Taiwan 47.1% while Japan grew about 10% in dollar terms (13.7% in yen). The lead was already visible in the first quarter, when South Korea shipped $219.9bn against Japan's $188.8bn. For context, South Korea's annual exports topped $700bn for the first time in 2025 at $709.7bn, Taiwan hit a record $640.75bn, and Japan remained the world's sixth-largest exporter, down from third in the 1970s-1990s and fourth in the 2000s.

A finished-chip windfall, not broad strength

What looks like a national export race was in fact a product race.

Merchandise exports are the goods a country ships abroad; in this half-year, one product category decided the ranking. Integrated circuits the finished chips that go into servers were about 30% of total exports for both South Korea ($149bn) and Taiwan ($133.2bn) in the first half. For Japan they were about 5% ($21.2bn), roughly one-seventh of South Korea's.

The products are specific. High-bandwidth memory, or HBM, is stacked DRAM dynamic random-access memory, the short-term memory chips that feeds AI accelerators scarce, expensive, and dominated at the high end by SK Hynix and Samsung Electronics in South Korea and Micron in the US. In the first quarter of 2026 SK Hynix held about 58% of global HBM revenue, according to Counterpoint Research, well ahead of Samsung and Micron at about 21% each. Foundry and advanced packaging factories that make and assemble chips, notably TSMC's CoWoS (Chip on Wafer on Substrate) packaging process in Taiwan take that memory and package it with Nvidia's AI GPUs graphics processing units, the chips that power AI into finished accelerators. AI servers were only 17% of server units shipped but an estimated 74% of server market value, according to industry estimates cited in the reporting, so a few high-priced boxes move national totals.

That concentration explains both the windfall and the vulnerability. Chips accounted for an estimated 34.8% of Taiwan's exports last year about 70% when ICT products information and communications technology products such as servers, networking gear and related electronics linked to chips are included compared with an estimated 24.4% for South Korea for chips alone, or 32.1% when broader electronics and electrical goods such as displays and wireless devices are included, according to a Korea JoongAng Daily analysis, indicating higher concentration in Taiwan. When hyperscalers buy, Korea and Taiwan sell directly. The five largest hyperscalers Amazon, Microsoft, Alphabet, Meta and Oracle are together guiding $660bn to $725bn in capital spending in 2026, with roughly $450bn of that, about 75%, tied directly to AI infrastructure including GPUs, high-bandwidth memory and data centres, according to Intellectia's summary of earnings guidance. Goldman Sachs projects their combined spending from 2025 through 2027 will reach $1.15tn, more than double the $477bn of the prior three years, and Nvidia captures about 41.5 cents of every dollar hyperscalers spend on AI hardware. When that spending pauses, there is little else to cushion the fall.

Why Japan's strength missed the surge

Japan did not collapse. It is positioned upstream.

Japan dominates the machines and chemicals that make chips semiconductor manufacturing equipment and materials such as lithography tools, photoresist and silicon wafers. In the first half, Japan exported $15bn of chip-making equipment, well above South Korea's $5.2bn and Taiwan's $3.5bn. A snippet of a market-share analysis reported that its companies Tokyo Electron, Advantest and Lasertec in equipment, Shin-Etsu Chemical in wafers, and the top three photoresist suppliers, all Japanese hold more than half the global market for key inputs such as photoresist, but the full data was not available to confirm independently. The Netherlands overtook Japan as South Korea's largest source of equipment imports in 2025 (26.0% vs 23.7%) only because ASML, the Dutch company that is the sole supplier of extreme-ultraviolet, or EUV, lithography machines needed for advanced chips, sits in the Netherlands; South Korea is now about 25% of ASML's sales.

But equipment and materials do not scale like finished chips in a price-led, supply-constrained upcycle. As Kenta Maruyama, a researcher at Mitsubishi UFJ Research and Consulting, put it: "Even if countries expand semiconductor exports, shipments of parts, materials and manufacturing equipment are unlikely to increase as rapidly as finished products." When HBM is scarce and memory prices spike, the price of a finished AI accelerator jumps immediately; the price of the tool that made it does not. Japan benefits indirectly as Samsung, SK Hynix and Micron build new fabs chip fabrication plants, the factories that make chips, but it does not capture the same price surge.

That is layered on a longer stagnation. Stripped of price and currency moves, Japan's export quantity index export value adjusted to show real volume peaked before the 2008 global financial crisis and has moved sideways since. Nominal export values have risen with prices and a weak yen, but volume has not. Japan built post-war export power on textiles, steel, autos and electronics; it has not found a new mass-market finished product in the smartphone and AI era, and has lost share in shipbuilding, displays and steel to South Korea and China.

The map rewired: from China assembly to Taiwan packaging

The boom also redrew where chips go.

China remains South Korea's largest chip destination, but its share fell from 53.1% ($75.8bn) in 2022 to 40.3% ($74.46bn) in 2025. Taiwan tripled from $12.78bn to $36.77bn, from 9.0% to 19.9%, becoming the second-largest destination and overtaking Vietnam. For memory chips specifically, Taiwan's share of South Korea's memory exports jumped from 6.6% to 28.6% while China's fell from 71.5% to 50.1%.

Bank of Korea data shows why: Korean HBM is statistically exported to Taiwan, where TSMC packages it with Nvidia GPUs, before the finished accelerator goes to US data centres. The circular flow is Dutch EUV tools to Korean fabs, Korean HBM to Taiwan for packaging, finished accelerators to US hyperscalers. It replaces the old smartphone and PC chain centred on Chinese assembly.

What the dollar ranking hides

All half-year figures are dollar-denominated, so currency and price flatter the gap.

In June, Japan's exports rose 19.3% by value the fastest since November 2022, beating expectations but volumes rose just 0.2%, according to Marcel Thieliant, head of Asia-Pacific at Capital Economics. The strength was almost entirely soaring export prices, reflecting the yen at about 163 to the dollar and surging memory-chip prices; semiconductor shipments alone rose 53.8% in June. Nikkei noted the won and the Taiwan dollar also weakened against the dollar, suggesting exchange rates alone do not explain the roughly 50% versus 10% growth gap, though the comparison is not fully quantified in the available data, so the price-versus-volume distinction is critical. Japan's flat quantity index means its recent nominal growth is price and currency, not more boxes shipped; South Korea and Taiwan's surge is both price and volume.

Half-year rankings are also volatile. For the full year 2025, Japan was still ahead of South Korea by about $29bn. Japan rebounded strongly in June on equipment exports to Taiwan (+46.4%) and China (+17.6%). Whether the first-half pass becomes a full-year lead will turn on second-half seasonality, any yen rebound, and US tariffs currently 15% on Japan as well as memory prices.

Powerful, concentrated, and exposed

That concentration is why the lead is both large and brittle.

South Korea and Taiwan are the most exposed if AI spending cools. SK Hynix drew about 65% of revenue from the US in the first quarter of 2026 nearly 69% for full-year 2025 and about 24% from Nvidia alone in 2025 (about 15% in the first quarter of 2026), according to the company's disclosures cited by 247WallSt; Taiwan's export concentration and TSMC's roughly 50% weight in the local equity market amplify macro sensitivity. Japan's equipment and materials makers are less directly exposed their demand lags chip prices and benefits from fab construction even in a price downturn though they would suffer if hyperscalers cut capital spending outright.

The cyclical risk is dated, not yet observed. Samsung, SK Hynix and Micron are expanding simultaneously Micron with a $100bn fab in New York, SK Hynix with about $40bn in fab investment, Samsung with plans running into the trillions of won through 2040 with a roughly three-year lag from investment to output. Forecasters put the potential glut at different points: Counterpoint Research warns supply could become visible in the second half of 2027, Handel Jones of International Business Strategies sees a boomerang of oversupply in 2028 after a five- to six-fold AI capex surge since 2020, and others see a DRAM inflection by 2029. China's CXMT, the Chinese memory-chip maker CXMT, which will account for an estimated 30% of new global DRAM capacity by 2028 and doubled its market share to 6% in 2025, could accelerate pressure. Current margins reported at about 84.9% for Micron and about 72% for SK Hynix at the peak in industry reporting are priced for scarcity, though the figures reflect reported peak margins and not independently verified full-cycle profitability.

Japan is trying to close the finished-chip gap by building it. The Ministry of Economy, Trade and Industry approved an additional 563.15bn for Rapidus in fiscal 2026, bringing cumulative support to 2.354tn, targeting 2nm mass production in Hokkaido in the second half of fiscal 2027, with a golden share giving the state veto power. It is also backing TSMC's fab in Kumamoto and Micron's 1.5tn HBM fab in Hiroshima (with up to 536bn in support). Analysts are skeptical: one estimate puts the chance of high-volume 2nm by 2027 at 5%, with 65-70% of the project still in R&D and a funding gap to the 5-7tn needed for stable production, while TSMC and Samsung are already in 2nm volume.

The first-half overtaking is established as a half-year, dollar-denominated fact driven by a narrow AI stack. Whether it marks a structural rewiring of East Asia's export map the iron triangle of Nvidia, TSMC and Samsung/SK Hynix replacing the old China-assembly chain or a price-driven spike that narrows when currencies, tariffs and memory supply turn, will be decided in the second half and, more durably, after 2028.

Source recordSources / claims / limits

How this piece is framed: The AI chip stack rewrote East Asia's export map — a concentrated finished-chip windfall for Korea/Taiwan versus Japan's upstream trap

Visuals not shipped — planned but not fulfilled

  • The overtaking was a finished-chip windfall — Japan kept the equipment lead (req_korea_taiwan_japan_h1_split): integrity_check_failed — figure check: numbers not found in cited evidence — 149.0, 347.3, 30.0, 283.4, 32.0, 363.2, 5.5, 15.0
  • A decade of convergence, then a sharp AI-driven pass in H1 2026 (req_export_trajectory_2019_2026): integrity_check_failed — figure check: numbers not found in cited evidence — 2019.0, 542.2, 329.3, 705.6, 2020.0, 512.5, 345.3, 641.3, 2021.0, 644.4, 446.4, 756.0, 2022.0, 479.5, 746.8, 2023.0, 632.2, 432.5, 717.3, 2024.0, 475.1, 707.0, 2025.0, 640.8, 738.3, 2025.65, 416.7

Sources

Claims, and how far we tracked each down

  • [confirmed] South Korea's exports in H1 2026 (January-June) totaled $496.3 billion · read in full (as of 2026-08-07)
  • [confirmed] Taiwan's exports in H1 2026 totaled $416.6 billion · read in full (as of 2026-08-07)
  • [confirmed] Japan's exports in H1 2026 totaled $384.4 billion · read in full (as of 2026-08-07)
  • [confirmed] H1 2026 was the first time both South Korea and Taiwan each surpassed Japan in total exports in the same half-year period · read in full (as of 2026-08-07)
  • [confirmed] In H1 2026 South Korea and Taiwan exports grew close to 50% year-on-year, while Japan's exports grew nearly 10% year-on-year · read in full (as of 2026-08-07)
  • [confirmed] South Korea's integrated circuit (semiconductor) exports in H1 2026 were $149 billion, about 30% of its total exports · read in full (as of 2026-08-07)
  • [confirmed] Taiwan's integrated circuit exports in H1 2026 were $133.2 billion, about 30% of its total exports · read in full (as of 2026-08-07)
  • [confirmed] Japan's integrated circuit exports in H1 2026 were $21.2 billion, about 5% of its total exports and roughly one-seventh of South Korea's · read in full (as of 2026-08-07)
  • [confirmed] Japan's semiconductor manufacturing equipment exports in H1 2026 were $15 billion, exceeding South Korea's $5.2 billion and Taiwan's $3.5 billion · read in full (as of 2026-08-07)
  • [confirmed] Taiwan's share of South Korea's semiconductor exports rose from 9.0% in 2022 ($12.78bn) to 19.9% in 2025 ($36.77bn), becoming the second-largest destination · read in full (as of 2026-08-07)
  • [confirmed] China's share of South Korea's semiconductor exports fell from 53.1% in 2022 ($75.8bn) to 40.3% in 2025 ($74.46bn) but remained the largest destination · read in full (as of 2026-08-07)
  • [confirmed] The AI supply chain now centers on Nvidia (GPU design), TSMC (foundry and advanced packaging), and Samsung Electronics/SK Hynix (HBM), with Korean HBM shipped to Taiwan for packaging before delivery to US hyperscalers · read in full (as of 2026-08-07)
  • [confirmed] South Korea H1 2026 exports $496.3bn exceeded Japan $384.4bn by $111.9bn - first simultaneous overtaking per Nikkei analysis of national stats + JETRO/UN Comtrade (methodology table snapshotted via Aju/SBS; Taiwan MOF July 9 confirms $416.66bn +47.1% YoY) · read in full (as of 2026-08-07)
  • [confirmed] Taiwan H1 2026 exports $416.6bn ($416.66bn MOF) exceeded Japan $384.4bn by $32.2bn, +47.1% YoY record, June $74.83bn +40.3% YoY · read in full (as of 2026-08-07)
  • [confirmed] Japan H1 2026 exports $384.4bn in Nikkei dollar comparison = 60.66trn (+13.7% YoY yen basis) per MOF customs; June 9.8trn +17.7% YoY · read in full (as of 2026-08-07)
  • [confirmed] H1 2026 YoY: Korea ~48.4% / Taiwan 47.1% vs Japan ~10% dollar (~13.7% yen) - FX alone not explanatory as won/NT$ also weak per Nikkei note · read in full (as of 2026-08-07)
  • [confirmed] Korea annual exports exceeded $700bn first time in 2025: $709.7bn (+3.8% YoY) per MOTIR final; $700bn milestone hit ~13:00 Dec 29 2025; semiconductors $173.4bn (24.4% share) · read in full (as of 2026-08-07)
  • [confirmed] Taiwan annual exports record $640.75bn in 2025 +34.9% YoY per MOF, Dec +43.4% YoY · read in full (as of 2026-08-07)
  • [confirmed] Korea July 2026 exports $98.89bn +62.8% YoY, semiconductors $41.01bn +178.8% YoY topping $40bn second month, per MOTIR · read in full (as of 2026-08-07)
  • [confirmed] Taiwan share of Korea semiconductor exports 9.0% (2022) -> 19.9% (2025) becoming No.2, per BOK Map; driven by HBM to Taiwan for TSMC CoWoS packaging with Nvidia GPUs · read in full (as of 2026-08-07)
  • [confirmed] Netherlands 26.0% of Korea chip equipment imports 2025 (vs Japan 23.7%) overtaking Japan, due to ASML EUV monopoly; Korea 25.0% of ASML sales · read in full (as of 2026-08-07)
  • [confirmed] Japanese government (METI) counters H1 ranking narrative with national semiconductor strategy centered on Rapidus: additional 5631.5bn ($4.0bn) support for FY2026 decided April 11, bringing cumulative R&D support to 2.354tn ($14.8bn), targeting 2nm mass production in H2 FY2027 at Chitose, Hokkaido, with METI Minister Ryosei Akazawa pledging 'spare no necessary support'. Primary METI action; steelmans Japanese official pushback that H1 gap reflects upstream positioning while Tokyo funds finished-chip catch-up. · read in full (as of 2026-08-07)
  • [confirmed] Rapidus governance shifted from grants to direct state ownership: 150bn equity via IPA (June 2026), golden share veto for METI, projected total gov support >3tn (~$18.8bn) by end FY2027 vs 167.6bn private from 32 firms; analysts skeptical Semiecosystem Mark LaPedus estimates 5% probability of high-volume 2nm by 2027, 65-70% still in R&D, with funding gap to 5-7tn needed for stable production and TSMC/Samsung already in 2nm volume late 2025. · read in full (as of 2026-08-07)
  • [confirmed] Mitsubishi UFJ Research and Consulting researcher Kenta Maruyama: 'Even if countries expand semiconductor exports, shipments of parts, materials and manufacturing equipment are unlikely to increase as rapidly as finished products' explaining why Japan's $15bn equipment exports (vs $5.2bn Korea, $3.5bn Taiwan in H1) expanded more slowly than Korea/Taiwan ~30% IC share finished-chip surge. · read in full (as of 2026-08-07)
  • [likely] Memory-cycle skeptics warn current AI-driven shortage flips to glut around 2028-2029: Counterpoint Research warns sharp price correction if supply becomes visible H2 2027; Handel Jones (IBS) says AI capex surge 5-6x since 2020 could boomerang as oversupply in 2028; Sungkyunkwan Prof Kwon Seok-jun says HBM glut probability low but commodity DRAM inflection by 2029 if AI returns disappoint; Morgan Stanley estimates China (CXMT) will account for 30% of new global DRAM capacity by 2028. · read in full (as of 2026-08-07)
  • [confirmed] H1 overtaking is dollar-denominated, price- and FX-driven half-year reading, not volume: Japan June 2026 exports +19.3% YoY by value but volumes +0.2% only, per Capital Economics Marcel Thieliant, reflecting yen at ~163/dollar and soaring memory prices (semiconductor shipments +53.8%); won/NT$ also weak, but price effect dominates, and Japan's export quantity index flat since pre-2008. · read in full (as of 2026-08-07)
  • [contested] H1 2026 simultaneous overtaking does not yet equal full-year regime change: full-year 2025 Japan still ahead of Korea by ~$29bn (and 6th globally), H1 is seasonally volatile, and Japan rebounded strongly in June (+19.3%) on semiconductor equipment to Taiwan (+46.4%) and China (+17.6%); whether H2 seasonality, yen moves, and US tariff effects (15% on Japan) narrow gap remains open. · read in full (as of 2026-08-07)
  • [confirmed] Japan June 2026 exports +19.3% YoY by value but +0.2% by volume per Capital Economics Marcel Thieliant, yen ~163/dollar, semiconductor shipments +53.8%, equipment to Taiwan +46.4% · read in full (as of 2026-08-07)
  • [confirmed] Japan's export quantity index (volume excluding price effects) peaked before the 2008 global financial crisis and has been stagnant in recent years · read in full (as of 2026-08-07)
  • [confirmed] Japan was the world's 3rd-largest exporter from the 1970s-1990s, fell to 4th in the 2000s behind China, and to 6th in 2024-2025 behind the Netherlands and Hong Kong · read in full (as of 2026-08-07)
  • [likely] Record yen depreciation made Japan's dollar-denominated exports appear smaller, but the Korean won and Taiwan dollar also weakened against the dollar, so exchange rates alone do not explain the overtaking · read in full (as of 2026-08-07)
  • [likely] Japan retains dominant global share in semiconductor materials and equipment: top three photoresist suppliers are Japanese, Shin-Etsu leads silicon wafers, and Japan supplies over 50% of photoresists · from a source summary — we did not read the full source
  • [confirmed] The Netherlands overtook Japan as South Korea's largest source of semiconductor manufacturing equipment imports (26.0% vs 23.7% in 2025), driven by ASML EUV lithography · read in full (as of 2026-08-07)
  • [likely] Hyperscaler AI infrastructure capex is highly concentrated, with estimates of ~$450bn of ~$600bn total capex tied to AI in 2026 and ~$1.15 trillion from 2025-2027, with Nvidia capturing ~41.5 cents per dollar of AI hardware spend · read in full (as of 2026-08-07)
  • [likely] Chips were 34.8% of Taiwan's exports in 2024 (about 70% including ICT) versus 24.4% for Korea (32.1% including broader electronics), indicating higher concentration in Taiwan · read in full (as of 2026-08-07)
  • [confirmed] For memory chips specifically, Taiwan's share of Korea's memory exports rose from 6.6% to 28.6% while China's fell from 71.5% to 50.1% between 2022 and 2025 · read in full (as of 2026-08-07)
  • [confirmed] SK Hynix held about 58% of global HBM market revenue in Q1 2026 per Counterpoint Research, with Samsung and Micron each about 21% · read in full (as of 2026-08-07)
  • [confirmed] Japanese official-adjacent narrative via Micron-Hiroshima alliance: Micron investing 1.5tn (~14tn won) in Higashi-Hiroshima HBM fab from 2028 with METI support up to 536bn (one-third), framed by METI Minister Akazawa as 'tremendous significance for Japan to produce advanced memory independently' part of building complete supply chain (TSMC Kumamoto + Rapidus 2nm + memory) rather than conceding finished-chip race. · read in full (as of 2026-08-07)

Where we hit a limit / what to double-check

  • We did not obtain the full text of Global Semiconductor Materials Market Share Analysis: Japanese Enterprises Lead (https://eu.36kr.com/en/p/3918968758300292); claims resting on it are from its summary — you may be able to reach it directly.
  • We did not obtain the full text of Trade Statistics of Japan - June 2026 & H1 2026 Provisional (MOF Customs) (https://www.customs.go.jp/toukei/info/index.htm); claims resting on it are from its summary — you may be able to reach it directly.
  • Figures we could not match to our stored evidence — worth confirming against the source (which may state them exactly), and note live sources move: 74%, 69%, 24%, 84.9%, 72%.