U.S. Imports Jumped 19.7% in Q3 as AI Buildout Lifted Growth; South Korea's Chip Boom Left Households Behind

The AI buildout is showing up in two sets of national accounts released this week. In the United States, it is driving investment and a flood of imports. In South Korea, it is driving exports, record corporate profits and a consumer who is pulling back.

America builds, and buys abroad

The Commerce Department reported Thursday that U.S. GDP grew at a 3.4% annualized rate in the third quarter, up from 2.2% in the second. That beat economists' expectations.

Business investment did the work. Nonresidential fixed investment rose at a 12.7% annualized rate and contributed 1.78 percentage points to growth. Equipment investment jumped 20.9% and contributed 1.16 points on its own.

Information-processing gear led the way. Computers and peripherals added 0.72 point and other information-processing equipment added 0.14, so nearly nine-tenths of a percentage point of growth came from that category alone.

Then came the other side of the ledger. Net exports subtracted 3.32 percentage points from growth. Harvard economist Jason Furman noted Thursday that this is the third-largest negative contribution in the quarterly series, which goes back to 1947. The second-largest came in the first quarter of 2025, when companies rushed in goods ahead of President Trump's tariffs.

Imports rose at a 19.7% annualized rate. Goods imports alone climbed 26.4%.

Breitbart's business digest reads the numbers as an indictment of decades of neglect. Its argument is that American companies are building the infrastructure of the future with equipment made largely by foreign factories, and that trading partners ran successful economic nationalist policies while the U.S. did not. "We cannot supply the seed corn that we're planting in our fields," it wrote.

The accounting itself is less alarming than the headline number. Imports are subtracted in GDP because they are foreign production already counted in U.S. spending and investment. The subtraction keeps foreign-made goods from inflating American output, so a big net-export drag does not mean the economy shrank by that amount. The dependence on imported equipment is the real issue, and it is a policy question rather than an arithmetic one.

Korea's chip windfall

The other end of the supply chain looks very different. The Bank of Korea said Tuesday that South Korean GDP grew 1.0% quarter on quarter in July through September, up from 0.6% in the second quarter. Economists polled by Reuters had expected 0.7%, and a Bloomberg survey had 0.8%. The central bank's own August projection was 0.3%. Year on year, the economy grew 3.4%.

Bank of Korea Director General Lee Dong-won said semiconductors generated about half of the quarter's growth.

Facilities investment rose 4.1% from the prior quarter, led by chip-making machinery. Intellectual property investment rose 2.3% and construction investment 0.7%. Exports rose 2.3% and imports 2.4%, with chipmaking equipment among the leading imports. Exports topped $800 billion in the first nine months of 2026, already above any previous full year.

The corporate numbers are enormous. SK hynix reported third-quarter operating profit of 83.33 trillion won ($62.36 billion), up 632% from a year earlier. Samsung Electronics reported 107.44 trillion won, up 783.1%.

The households did not get the memo

Private consumption fell 0.2% from the previous quarter, reversing a 0.4% gain in the second quarter. Government consumption jumped 1.9%.

"The headline number is strong, but you have to look at the quality of growth," said Jeong-Woo Park, an economist at Nomura Holdings. "Companies and the government are benefiting from and spending the money generated by the semiconductor boom, but households are being left behind." Park pointed to tighter financial conditions after rate increases, negative wealth effects from the stock-market correction, and persistent weakness in employment.

A Korea Herald editorial laid out more of the strain. It cited average monthly job gains over the first nine months that were the lowest in six years, weaker consumer confidence, and a 1.04% delinquency rate on Industrial Bank of Korea loans, the highest since records began in 2011. Samsung's chip division generated nearly all of its operating profit and offset an 800 billion won loss in consumer electronics and mobile.

The editorial also argued that about 78% of the recent rise in chip exports came from higher prices rather than larger volumes. It said SK hynix reported an 80% operating margin and that long-term agreements cover more than half of its 2027-28 production capacity. Real gross domestic income rose 18.8% from a year earlier, the biggest gain since 1977.

The split complicates monetary policy. The Bank of Korea held its benchmark rate at 3% last week after quarter-point increases in July and August. Governor Shin Hyun Song has said policy will stay restrictive until the bank is confident inflation will converge on its target. Weak spending gives policymakers a reason to move more cautiously on further hikes, according to the NDTV Profit/Bloomberg report on the data.

The shared exposure

Both economies are leaning on the same demand. Semiconductor exports made up nearly half of Korea's total shipments in September, according to the Korea Herald editorial. The Bank of Korea has warned that a slowdown in U.S. technology giants' AI spending could sharply reduce chip exports and take 0.4 percentage point off Korean growth. The central bank said it expects exports and investment to stay strong in the fourth quarter.

The open question is how long U.S. companies keep spending at this pace. American growth, Korean exports and Korean corporate profits are all riding on it.