[Editorial] Korea’s semiconductor bid exposes risky one-engine financial system

1 of two | epa12689577 flutters delivery air its headquarters in Seoul, South Korea, 29 January 2026. File. Photo by YONHAP/ EPA

Jan. 30 (Asia This day) — Despite dreary domestic quiz, South Korea’s stock market is surging, driven largely by a semiconductor supercycle led by SK Hynix and Samsung Electronics.

SK Hynix closing One year posted file gross sales exceeding 97 trillion obtained (about $67.6 billion) and running earnings of 47 trillion obtained (about $32.8 billion), with both its annual and fourth-quarter results reaching all-time highs. Notably, its fourth-quarter running margin surpassed that of Taiwan’s leading foundry, underscoring now not accurate for enhance however also for profitability. Samsung Electronics also reported gross sales of 333 trillion obtained (about $232.2 billion) and running earnings of 43 trillion obtained (about $30.0 billion), up 11% and 33% One year on One year. Its semiconductor division alone generated 44 trillion obtained (about $30.7 billion) in gross sales and 16 trillion obtained (about $11.2 billion) in running earnings within the fourth quarter.

These earnings surprises had been fueled by bigger gross sales of excessive-payment merchandise such as excessive-bandwidth memory and rising memory costs. On the aid of the two chipmakers, the benchmark KOSPI index climbed past 5,200 on Jan. 29. Replace forecasts point out the semiconductor supercycle could perchance well well proceed this One year, with mixed running earnings potentially exceeding 200 trillion obtained (about $139.4 billion) and, in some projections, drawing advance 300 trillion obtained (about $209.2 billion) as memory shortages deepen and dominance within the excessive-bandwidth memory market strengthens.

What is troubling, then all over again, is the extent to which the broader financial system relies on this single engine. Even supposing exports topped $700 billion closing One year, fourth-quarter enhance became unfavorable and annual enhance used to be restricted. The semiconductor-centered IT manufacturing sector accounted for a big selection of of the nation’s modest GDP expansion, implying that with out semiconductors total enhance would had been some distance weaker.

While the semiconductor bid is anticipated to closing at the least by this One year, stock markets in general imprint in stipulations about six months forward. The chip-led rally can also merely as a result of this truth flee into limits later this One year. Beyond that level, risks loom. The automobile sector faces uncertainty from Trump-technology tariffs and like a flash shifts against self sustaining and next-technology mobility. Steel, petrochemicals and batteries are struggling amid oversupply driven by China-led competition.

The old administration pledged to foster prescribed tablets and biotechnology as next-technology core industries, however tangible development has been restricted. Constructing unique enhance engines indirectly is reckoning on government policy resolve. A recent chronicle by the Korea Institute for Industrial Economics & Replace noted that necessary powers such because the USA and China are aggressively selling strategic industries with a wide collection of policy instruments, while South Korea stays comparatively passive.

Revitalizing industrial policy will require filled with life restructuring of lagging sectors and stronger coordination across ministries. Leaving the whole lot to non-public initiative is now not passable. To stable sustainable enhance past semiconductors, the government must mobilize rather more policy instruments to improve domestic production and cultivate unique core industries.

— Reported by Asia This day; translated by UPI

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