South Korea in January 2026: the most important developments in economy
South Korea's economy in January 2026 was dominated by the boom in artificial intelligence chips. Samsung Electronics reported record quarterly operating profit on 29 January, beating expectations, and is preparing to compete with SK hynix in next-generation HBM4 memory. SK hynix became the country's most profitable company and sped up the opening of a new chip fab, while both firms prepared record employee bonuses and warned that the AI boom is squeezing chip supplies for PCs and phones. Exports rose in January on strong semiconductor demand. Outside chips, Hyundai Motor reported a 19.5% drop in 2025 operating profit despite record sales, and LG Electronics posted its first net loss in a year.
The second theme was trade with the United States. Seoul said on 15 January that new US tariffs on advanced semiconductors would have limited impact, and negotiated for favourable terms. On 27 January President Donald Trump announced plans to raise tariffs on South Korean imports to 25%, focused on autos and other goods, and US officials said Seoul had failed to keep its commitments, pressed it to ratify a pending trade deal and warned against targeting Coupang. Trump later said the two sides would work something out. Coupang investors asked for a US investigation, and the company's CEO Kim Bom-suk was questioned by police over a data breach. South Korea was also redesignated to a US currency monitoring list.
The won and the wider economy drew attention too. The central bank held its benchmark rate at 2.5%, Scott Bessent said the won's depreciation did not match fundamentals, and the IMF warned of large dollar exposure while raising its 2026 growth forecast to 1.9%. The finance minister expected the won to strengthen to the 1,400 level within one to two months. The Kospi passed 5,000 points, although the economy contracted unexpectedly in late 2025.
On policy and business deals, the AI Basic Act took effect on 22 January. President Lee Jae-myung and Italy's Giorgia Meloni agreed to deepen AI cooperation. Palantir signed a deal worth hundreds of millions of dollars with HD Hyundai, Hanwha Aerospace won a $1.9 billion rocket launcher contract from Norway, and Seoul signed economic agreements with Egypt and Canada.
by WorldBrief & Maksim Micheliov | AI-generated summary
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