Taiwan and South Korea Surpass Japan in Chip Exports! 2026 H1 Trade Data: TSMC, Samsung, and SK Hynix Lead the Way

Fueled by surging artificial intelligence (AI) demand, Taiwan and South Korea achieved export values exceeding Japan’s for the first time during the first half of 2026. In contrast, Japan’s strengths remain largely confined to semiconductor-related materials and manufacturing equipment, resulting in significantly lower benefits from this wave of demand.

According to the Nikkei, analysis of trade statistics from Japan, South Korea, and Taiwan—combined with data from the Japan External Trade Organization (JETRO) and the United Nations’ UN Comtrade database—shows that in U.S. dollar terms, South Korea’s exports reached $496.3 billion from January to June 2026, Taiwan’s hit $416.6 billion, while Japan’s stood at $384.4 billion. This marks the first time both Taiwan and South Korea have simultaneously surpassed Japan in export volume.

Compared to the same period last year, Japan’s exports increased by nearly 10%, whereas South Korea and Taiwan saw growth of almost 50%, clearly outpacing Japan in expansion rate.

The primary driver behind this shift is the explosive growth in demand for AI semiconductors. Taiwan’s TSMC and South Korea’s Samsung Electronics and SK Hynix are leading the production of advanced chips, positioning them at the forefront of this technological surge.

In the first half of 2026, South Korea’s integrated circuit (IC) exports totaled $149 billion, while Taiwan’s reached $133.2 billion. ICs account for approximately 30% of total exports in both countries. Notably, South Korea’s IC exports in just the first half of 2026 exceeded its full-year total for 2025. In contrast, Japan’s IC exports amounted to $21.2 billion, representing only about 5% of its overall exports.

Japan maintains a competitive edge in semiconductor manufacturing equipment and materials. Companies such as Tokyo Electron, Advantest, and Lasertec hold dominant global market shares and indirectly benefit from AI-driven demand through the global expansion of semiconductor production systems.

Japan’s semiconductor equipment exports reached $15 billion in the first half of 2026, surpassing South Korea’s $5.2 billion and Taiwan’s $3.5 billion. However, compared to South Korea and Taiwan, which control high-value, rapidly expanding end-market semiconductor products, Japan’s reliance on upstream equipment alone is insufficient to close the gap.

Kenta Maruyama of Mitsubishi UFJ Research and Consulting noted, “Even as semiconductor exports rise globally, related components, materials, and manufacturing equipment rarely expand at the same pace.” Exchange rates also play a role—yen remains at historically low levels, suppressing Japan’s dollar-denominated export figures. Yet, the Korean won and New Taiwan dollar have similarly faced depreciation pressures, meaning currency effects alone cannot fully explain South Korea and Taiwan’s overtaking of Japan.

More importantly, Japan’s weakening export competitiveness is not a short-term phenomenon triggered solely by the AI boom. JETRO data shows Japan fell to sixth place globally in export value in 2025. From the 1970s to the 1990s, Japan consistently ranked third worldwide, behind only the U.S. and Germany. In the 2000s, China’s rise pushed Japan to fourth, and more recently, Japan has been overtaken by international trade hubs like the Netherlands and Hong Kong.

Post-war Japan rose through industries such as textiles, steel, automobiles, and electronics, building a trade-dependent economy by supplying fast-growing global markets. However, in the AI era, global demand has rapidly shifted toward advanced semiconductors. Taiwan and South Korea have seized this new growth opportunity through their strengths in wafer foundry and memory production, while Japan remains primarily strong in upstream materials and equipment.

Going forward, Japan’s ability to cultivate new growth industries aligned with the digital and AI age—beyond its existing strengths in semiconductor equipment and materials—will be crucial in reversing its declining export competitiveness.