K-Beauty and Semiconductors Deliver as SME Exports Hit Record High

[Financial News] K-beauty's global expansion and the boom in the artificial intelligence (AI) industry are emerging as growth drivers for SME exports. Cosmetics are expanding into markets beyond North America and Europe, reaching as far as Latin America, while semiconductor exports are surging on increased AI-related demand. As a result, SME exports hit a record high in the third quarter of this year. 
 According to the '2026 Third-Quarter SME Export Trends' released on the 26th by the Ministry of SMEs and Startups (MSS), SME exports in the third quarter reached $33.4 billion, up 8.8% from the same period a year earlier. Cumulative exports through September this year also hit a record high of $96.5 billion, up 9.5% year over year. The number of exporting SMEs rose 1.6% over the same period to 90,765.
 Cosmetics posted particularly strong growth. SME cosmetic exports reached $2.79 billion in the third quarter and $7.65 billion cumulatively from January to September, up 28.6% and 26.4%, respectively, from the same period a year earlier. Both figures were record highs.
 Export destinations are also expanding rapidly. By region, exports to North America ($690 million) rose 33.1% year over year, those to Europe ($670 million) increased 58.6%, and those to the Middle East ($120 million) grew 12.9%. Exports to Latin America surged 141.3% to $100 million. K-beauty's popularity is spreading beyond established core markets into emerging ones, diversifying export destinations.
 Semiconductors also drove export growth. Third-quarter semiconductor exports surged 68.8% from a year earlier to $1.39 billion. Exports of semiconductor manufacturing equipment also rose 38.3% over the same period to $1.14 billion. As the global AI market continued to boom, both product categories recorded their highest third-quarter figures on record.
 By contrast, automobile exports were weak in the wake of the war in the Middle East. Exports to the United Arab Emirates (UAE) plunged 66.6% due to route closures resulting from the war. Overall SME automobile exports consequently fell 42.4% to $1.5 billion in the third quarter.
 By country, the United States emerged as the largest export market. Exports to the United States rose 19.6% to $5.73 billion, a third-quarter record. Exports to China also increased 12.9% to $5.43 billion. In India ($980 million), exports—particularly of machine tools and other machinery—are growing in line with policies to promote manufacturing.
 Cosmetics have also become a key product in online exports. They accounted for 75.3% of SMEs' online export value, with cosmetics exports rising 97.5% year over year to $360 million. Exports to the United Kingdom and the Netherlands surged 729.6% and 515.3%, respectively, making the European market a new growth driver for SMEs' online cosmetics exports.
 Shim Jae-yoon, Director General for Global Growth Policy at the Ministry of SMEs and Startups, said, “Despite continued instability in the external environment, SME exports are performing strongly in key markets such as the United States and emerging markets such as Latin America, led by K-beauty.” He added, “We will strengthen various support programs—including export vouchers, overseas certifications, and joint overseas expansion by large, medium and small enterprises—and work to minimize export difficulties so that SMEs can grow into global companies.”
[email protected] Lee Ju-mi Reporter