* June exports +70.9% y/y, versus +61.0% forecast

* Semiconductor sales rise 200% on AI investment boom

* Chip demand seen robust through next year, analyst says

* Trade surplus at $138 billion for H1, versus $77 billion

for 2025

By Jihoon Lee

SEOUL, July 1 (Reuters) - South Korea's exports expanded at

the strongest pace in nearly half a century last month, smashing

forecasts, on a surge in chip sales propelled by the global boom

in AI investment.

Exports from Asia's fourth-largest economy rose 70.9% in

June from a year earlier to $102.25 billion, quickening from the

53.4% jump in May and marking the biggest year-on-year increase

since October 1978, preliminary trade data showed on Wednesday.

The annual percentage growth rate topped the median 61.0%

increase forecast in a Reuters poll, beating all 13 projections

provided by economists.

Semiconductor exports surged 199.5% to $44.8 billion, making

South Korea the fourth country in the world to reach a monthly

export value of $100 billion, after Germany, China and the

United States, according to the trade ministry.

"Exports will remain robust in the second half, led by

semiconductors. There is no sign of the chip boom waning

anywhere, so it won't easily cool down next year either," said

Park Sang-hyun, an analyst at iM Securities.

"Still, growth rates are seen nearing a peak," Park added.

Home to the world's biggest chipmakers Samsung Electronics ( SSNLF )

and SK Hynix, South Korea's exports have

been rising since June 2025 and posting double-digit growth

rates from December as global demand for AI investment drives up

memory chip prices.

A separate survey showed on Wednesday that South Korea's

factory activity expanded in June for the seventh consecutive

month but at a slower pace than the ‌previous month on falling

export demand.

In June, computer sales also rose 308.8% on increasing AI

investment by major technology firms, while steel products

snapped 13 months of decline to rise 9.6% on data center

construction. Petroleum products rose 49.8% on high oil prices.

By destination, shipments to China and the U.S. were up

92.1% and 78.6%, respectively, while those to the European Union

rose 31.8%. Exports to the Middle East fell 8.4%.

Imports rose 30.1% to $66.10 billion, after rising 20.7% the

previous month. That was faster than the 26.3% increase expected

by economists and the fastest since May 2022.

The country posted a monthly trade balance of $36.15 billion,

the biggest on record, bringing its trade surplus for the first

half of the year to $138.3 billion, compared with an annual

surplus of $77.4 billion for the whole year of 2025.