South Korea's Chip Industry Boom Expected to Pressure Central Bank for Rate Hikes

South Korea's chip industry is experiencing significant growth, which is anticipated to increase the country's trade surplus and pressure its central bank to raise interest rates later this year. According to Jin10, a team led by Goldman Sachs economist Tilton forecasts that South Korea will implement two 25 basis point rate hikes in the third and fourth quarters. They predict that South Korea's AI-related exports could double this year, reaching nearly 30% of the country's GDP. Meanwhile, non-tech exports are expected to remain sluggish due to regional supply surplus and energy shocks. The report suggests that a K-shaped cycle indicates the need for targeted and prudent fiscal policy, and as AI-driven exports rise significantly, the currency should appreciate.