South Korea emerging as winner in global economy, FT says

South Korea is becoming "a winner in the global economy," driven by booms in AI, shipbuilding, defense and semiconductors, according to a Financial Times report.

The British daily published the assessment Monday.

South Korea's GDP grew 3.6 percent year-on-year in the first quarter, as booms in strategic sectors such as semiconductors and defense spread across the broader economy. Michael Breen, CEO of Insight Communications, told the FT that "some sectors are in a sweet spot right now." Despite challenges including dependence on energy imports, high living costs and youth unemployment, "the growth engine is still working well," he added.

The AI boom has driven memory chip exports to lead overall export growth, lifting the share prices of Samsung Electronics and SK Hynix in particular.

Surging data center demand has also boosted order books at Hyosung Heavy Industries, HD Hyundai Electric and LS Electric, which manufacture ultra-high-voltage transformers, the FT said.

In shipbuilding, the FT noted that the industry is becoming a two-horse race between China and South Korea as other countries lose competitiveness, with the United States and its allies tilting toward South Korea. A worker at a Geoje shipyard said every available space is in use. "We are operating at more than 100 percent capacity. It's really incredibly busy," the worker said.

The defense industry is also booming amid Russia's invasion of Ukraine and security concerns across Europe, Asia and the Middle East, the FT said. South Korean weapons are becoming a cheaper alternative to Western arms because they carry few of the restrictions or delivery delays that often accompany American systems.

The FT added that South Korean cosmetics exports have reached second place globally behind France, and that tourist arrivals have surged.

The report also flagged risks, however. Competition from China and high oil prices are squeezing sectors such as steel and petrochemicals, while small and medium-sized enterprises are struggling with rising wage burdens and energy costs.

President Lee says stocks 'still slightly undervalued'

President Lee Jae Myung expressed confidence in the domestic stock market Monday, saying share prices had risen faster than he expected but that he still believed they were "slightly undervalued."

Speaking at a press conference marking his first anniversary in office, Lee was asked about the Kospi breaking through the 8,000-point mark. "I noticed as I was walking in that the Kospi had fallen below 8,000," he said. "Someone might call that a massive crash, but compared to the 2,700 level before I took office, it has risen enormously."

On his campaign pledge to push the Kospi to 5,000, Lee said he had expected it would take about two to three years but that it happened within six months. He attributed the rally to "trust."

"Like a spring returning to its natural position, the Korean stock market had been pressed down far too much and was strangely too low," Lee said. "At best, it was only getting about 60 percent of the valuation it deserved."

He also said he had believed the Kospi could surpass 5,000 through normalization measures alone, setting aside any semiconductor-sector windfall. He cited easing geopolitical instability on the Korean Peninsula, clearly articulating national industrial and economic policy, improving predictability and preventing market manipulation as key steps in restoring investor confidence.

"I couldn't bring myself to say it could reach 6,000 or 7,000 just by cleaning up those abnormalities, so I cautiously said 5,000," Lee said. "Then the semiconductor boom came, and I think that accounts for another 2,000 to 3,000 points — things are roughly playing out as I envisioned."

[영상] 젠슨 황 “현대차의 시간 왔다”…양재사옥 로봇 둘러보고 ‘깐부’ 정의선과 회동

젠슨 황 엔비디아 최고경영자(CEO)가 8일 현대자동차그룹 양재사옥을 찾아 정의선 현대차그룹 회장과 회동하며 현대차그룹의 피지컬 AI 전략에 대한 강한 기대감을 드러냈

https://biz.heraldcorp.com/article/10766141

yul@heraldcorp.com