South Korea’s nominal GDP grew 21.9% year-on-year in the first half 2026, driven by a semiconductor export surge that accounts for 70% of total expansion, the Bank of Korea reported on September 10, according to Chosun Daily.

The concentration of national income gains in a single high-tech export segment leaves Asia's fourth-largest economy uniquely vulnerable to rapid shifts in global corporate capital spending.

Major income flows from chip exports are altering economic metrics, Deputy Governor Park Jong-woo said at a press briefing on September 10. Such scale of income growth has not occurred since the 1970s. The central bank expects corporate profits to translate into higher wages, retail spending, and property purchases across the economy. Excess funds flowing into asset markets could increase financial stability risks.

Real estate prices in key technology hubs have already accelerated. Apartment prices rose 0.65% w/w in Suwon Yeongtong, 0.32% w/w in Yongin, and 0.25% week on week in Hwaseong Dongtan in the final week of August. All three regions outpaced the Gyeonggi province average rise of 0.19%. Housing-related loans across financial institutions grew by an average of KRW4 trillion ($2.9bn) monthly from January to August.

Rising incomes are driving demand-led inflation. August CPI rose 3.1% year-on-year, while core inflation reached 3.3%. The Bank of Korea raised its base rate from 2.5% to 3.0% across back-to-back meetings in July and August. Park described the hikes as front-loading to ease price pressures, but cautioned that monetary policy operates with a lag.

Uncertainties surrounding Middle East conflict risks and the lagging impact of past rate hikes make it difficult to commit to a specific path for October’s rate decision, Park said.

The duration of the domestic boom depends heavily on global AI spending. US technology firms Amazon (AMZN:US), Microsoft (MSFT:US), Alphabet (GOOGL:US), Meta (META:US), and Oracle (ORCL:US) account for 75% of global AI investments this year. However, the Bank of Korea forecasts AI investment growth will peak before year-end.

IT research firm Gartner projects global AI infrastructure spending growth will slow from 61% in 2026 to 19% by 2028. Bloomberg Intelligence forecasts capital expenditure growth among top US and Chinese tech firms will drop from 95% to 13% over the same period.

Risks include price competition from low-cost open-source AI models and uncertain investment returns. Big tech firms have increased corporate bond issuance since late last year, with select firms facing rising credit default swap (CDS) premiums.

The Bank of Korea warned that vendor financing practices—where hardware suppliers like Nvidia (NVDA:US)  fund GPU purchases for cash-strapped firms—resemble the 1990s dot-com bubble. Special purpose vehicles (SPVs) for data center investments may also hide balance-sheet leverage, leaving global AI spending vulnerable to a sharp pullback if revenue generation slows.