US defense secretary plans South Korea trip for shipbuilding talks U.S. Defense Secretary Pete Hegseth speaks during a press conference in Warsaw, Poland, Feb. 14, 2025. Reuters-Yonhap SEOUL, February 27 (AJP) - U.S. Secretary of Defense Pete Hegseth is expected to visit South Korea next month, with discussions likely to focus on shipbuilding collaboration and defense cost-sharing, according to officials and industry sources, Thursday. The trip is set to follow U.S.-Japan defense ministerial talks in late March, positioning Hegseth as the first cabinet-level official from the second Trump administration to visit South Korea. “Secretary Hegseth's team has contacted Korean shipbuilders, including Hanwha Ocean,” an industry source said. A government source confirmed the visit was "highly likely" but had yet to be finalized. The discussions come as the Trump administration pursues an ambitious initiative to expand American naval power. The U.S. aims to build 364 new warships by 2054, a project estimated to cost $1.075 trillion, as it seeks to counter China’s rapidly growing maritime capabilities. A recent analysis by the Center for Strategic and International Studies (CSIS) found that China surpassed the United States in total fleet size in 2023, boasting 234 vessels compared to the U.S. Navy’s 219. While American warships maintain qualitative superiority, the numerical disparity continues to widen. The U.S. shipbuilding industry has seen a significant decline. According to U.S. Navy assessments, domestic ship production accounts for just 0.4 percent of China’s annual output. In 2023, China controlled roughly 60 percent of global shipbuilding orders, while the U.S. claimed a mere 0.13 percent of the global market in 2024. Washington has increasingly turned to allies with robust shipbuilding capabilities. Shortly after his election victory, U.S. President Trump emphasized the importance of naval cooperation with South Korea during a call with President Yoon Suk Yeol, stating, “We need to closely cooperate with Korea not only in ship exports but also in maintenance, repair, and operations.” Hanwha Ocean, which recently acquired Philadelphia Shipyard with Hanwha Systems, is emerging as a key partner in these efforts. The firm’s success in securing two maintenance, repair, and operations (MRO) contracts with the U.S. Navy in 2024 has heightened interest in its role. Meanwhile, HD Hyundai Heavy Industries is reportedly exploring investment opportunities in the United States, following its 2022 entry into the MRO sector through work with the Philippine Navy. In addition to shipbuilding, defense cost-sharing is expected to be a central topic in Hegseth’s meetings, with Washington potentially seeking an increased financial contribution from Seoul toward maintaining U.S. forces on the Korean Peninsula. 2025-02-27 10:26:10

How TSMC of Taiwan became beating heart of AI chip industry TSMC's Fab 6/ Courtesy of TSMC Editor's Note: This article is the eighth installment in our series on Asia's top 100 companies, exploring the strategies, challenges, and innovations driving the region's most influential corporations. SEOUL, February 26 (AJP) - At a distinguished industry event in late 2023, Jensen Huang, the founder and chief executive of Nvidia, took the stage to acknowledge a partnership he deemed indispensable to his company’s success. “Nvidia would not be possible without TSMC,” Huang said, turning toward his longtime collaborator. Huang praised Taiwan Semiconductor Manufacturing Company (TSMC) and its founder, Morris Chang, for engineering what he called “three true miracles.” He credited the company with developing custom chips for thousands of clients, mastering the art of mass production while maintaining small-scale customization, and advancing semiconductor technology at a breathtaking pace. Founded in 1987 by Chang as the world’s first dedicated semiconductor foundry, TSMC has since become a linchpin of the global technology supply chain. Unlike many semiconductor companies that design and manufacture their own chips, TSMC has built its business on a singular focus: fabrication. By abstaining from chip design, the company positioned itself as a neutral partner for firms seeking manufacturing expertise without the risk of competition. That strategy has propelled TSMC to the pinnacle of the foundry sector. In 2024, the company commanded 62 percent of global market revenue, dwarfing its closest competitor, Samsung Electronics, which held just 10 percent. TSMC’s clients include some of the world’s most influential technology firms, from Nvidia to Apple, all of whom depend on the company’s sophisticated manufacturing processes to remain at the forefront of artificial intelligence and computing. Chang, a Harvard graduate with a storied career at Texas Instruments and General Instruments, championed the then-unorthodox model of contract manufacturing at a time when semiconductor companies traditionally maintained their own fabrication plants. His vision, initially met with skepticism, ultimately proved prescient. Despite Taiwan’s early financial constraints, the island’s government provided crucial support for TSMC’s launch. The Dutch electronics firm Philips also stepped in with investment, helping the nascent company establish its footing. TSMC gained considerable momentum in the 2010s through its partnership with Apple, investing $9 billion to accommodate the tech giant’s demands. Under Chang’s leadership, the company cemented its role as the preferred chipmaker for industry leaders including AMD, Nvidia, and Qualcomm. He stepped down as chairman in 2018, passing the reins to C.C. Wei, who now serves as both chairman and chief executive. Reflecting on TSMC’s journey in an April 2021 speech, Chang remarked, “The advantage was having no competitors; the challenge was having no customers either.” He noted that the company’s fiercest competition does not come from China, but rather from South Korea’s Samsung. As the global artificial intelligence boom fuels unprecedented demand for high-performance chips, TSMC has reaped the benefits. The company reported a 34 percent increase in revenue in 2024, reaching 2.9 trillion New Taiwan dollars ($88 billion). Fourth-quarter revenue surged 38.8 percent to 868.46 billion New Taiwan dollars, surpassing analysts’ expectations. Net profit for the final quarter rose 57 percent. To sustain its dominance, TSMC has earmarked $6.3 billion this year for investment in advanced packaging technologies critical to chip performance and reliability. Among these initiatives is the development of co-packaged optics, an emerging innovation that integrates optical and electrical components to significantly accelerate data transmission beyond conventional copper connections. TSMC has also expanded its global footprint, committing to the construction of three manufacturing facilities in the United States, two in Japan, and one in Germany. Japan has pledged over 1.04 trillion yen in subsidies to support TSMC’s operations in Kumamoto as part of a broader national effort to revitalize its domestic semiconductor industry. While Taiwan’s government stated on Feb. 25 that it had not yet received formal applications for overseas investment, reports suggest that a partnership between TSMC and Intel had been proposed during the Trump administration. Under President Biden, the company secured funding for a manufacturing plant in Arizona — part of a $250 billion investment package, the largest foreign direct investment in U.S. history. As detailed in Chip War: The Fight for the World’s Most Critical Technology, TSMC has emerged as a key player in the ongoing geopolitical contest between the United States and China. In Taiwan, the company is often referred to as “Guardian Spirit Mountain,” a reflection of its crucial role in the island’s economy and national security. With artificial intelligence driving the next wave of technological advancement, TSMC remains at the forefront, enabling the world’s leading chip designers to bring their most ambitious innovations to life. ​​​​ 2025-02-27 10:07:47

South Korea birthrate rises for first time in 9 years Getty Images Bank SEOUL, February 26 (AJP) - South Korea’s birth rate increased for the first time in nine years in 2024, with the number of newborns rising by approximately 8,300 to 238,300, according to preliminary data released by Statistics Korea on Wednesday. The country’s total fertility rate — the average number of children a woman is expected to have in her lifetime — rose to 0.75 from 0.72 the previous year, marking the first uptick since 2015. The modest rebound follows years of decline, with births falling from 438,420 in 2015 to a record low of 230,028 in 2023, intensifying concerns about the nation’s demographic sustainability. Demographic shifts, rather than policy measures, appear to be driving the increase, experts say, pointing to the maturation of children born during the early 1990s’ baby boom, when annual births exceeded 700,000. However, the outlook remains challenging. The cohort effect is expected to be temporary, as younger generations continue to shrink in size. The country’s population has been in natural decline for the past five years, with deaths exceeding births by 118,881 in 2023. Despite the recent fertility rate increase, South Korea remains the only OECD country with a fertility rate below 1.0, far below the OECD average of 1.51 recorded in 2022. Still, some indicators suggest a possible shift. The number of newlyweds climbed to its highest level since 2019, with 222,422 couples marrying last year — a trend that could support further birth rate improvements. “The population of women in their early 30s has increased, and marriages that were delayed due to COVID-19 have consecutively risen,” said Park Hyun-jung, an official from Statistics Korea. “There has also been a shift in social values, with more positive views on marriage and childbirth.” 2025-02-26 16:22:17

Cryptocurrency exchange Upbit slapped with 3-month partial suspension Getty Images Bank SEOUL, February 26 (AJP) - South Korea’s financial regulator has imposed a three-month partial business suspension on Dunamu, the operator of the country’s largest cryptocurrency exchange, Upbit, citing violations of anti-money laundering regulations. The Financial Intelligence Unit (FIU) announced on Wednesday that the suspension, effective from March 7 to June 6, will bar new customers from transferring virtual assets to or from the platform. Existing users, however, will not be affected. Regulators had previously issued a preliminary notice to Upbit on Jan. 9 over alleged violations of customer identification rules. At the time, Upbit maintained that the suspension would not impact cryptocurrency trading for either new or existing users, signaling its intention to contest the allegations. A subsequent investigation, however, uncovered more than 34,000 instances in which the exchange approved customer registrations despite blurry identification documents or photocopied images. The probe also revealed 226,000 transactions conducted without proper customer verification and 189,000 cases in which driver’s licenses were processed without serial numbers being checked. Regulators further identified nearly 6,000 cases where address fields were either left blank or filled with incorrect information — critical lapses in security protocols intended to prevent illicit activities such as money laundering and fraud. Alongside the suspension, the FIU issued a disciplinary warning to Dunamu’s chief executive, Lee Seok-woo, and ordered the dismissal of the company’s compliance officer. Nine other employees also face sanctions for violating financial reporting laws. The warning against Lee is considered a serious disciplinary measure that typically disqualifies an individual from serving as an executive at financial institutions for three years. 2025-02-26 15:34:04

Middle East's growing healthcare market attracts Korean companies Dubai of the United Arabs Emirates/ Getty Images Bank SEOUL, February 26 (AJP) - South Korean pharmaceutical and biotechnology companies are making significant inroads into the Middle East, capitalizing on the region’s growing demand for medical and aesthetic treatments. Daewoong Pharmaceutical has recently entered the Saudi Arabian market with its botulinum toxin product, Nabota, making it the first Asian firm to introduce such a product in the country. While Daewoong had previously secured regulatory approvals in the United States, Europe, and Canada, Saudi Arabia’s stringent approval process had long posed a challenge for similar products. Simultaneously, Hugel has received approval from the United Arab Emirates for its botulinum toxin, Botulax. The company plans to launch the product in April through a strategic partnership with Medica Group. Medytox, another South Korean firm, has also secured regulatory approval in the UAE for two products in its hyaluronic acid filler series, Neuramis. The company is collaborating with BnD Bio, a local medical license holder, to enhance product recognition and distribution. Hanmi Pharmaceutical is also expanding into the region, having signed an exclusive licensing agreement with Saudi Arabia’s Tabuk Pharmaceuticals. The partnership will focus initially on exporting specialty drugs for urology and anti-cancer treatments across the Middle East and North Africa. Market analysts see strong growth potential in the region’s pharmaceutical and aesthetic medicine sectors. According to Research and Markets, the pharmaceutical market in the Middle East and Africa was valued at approximately $30.8 billion last year and is projected to grow at an annual rate of 6.1 percent, reaching $42.4 billion by 2030. The demand for aesthetic treatments is also surging. Saudi Arabia’s beauty and cosmetic surgery market is expected to grow from $7.9 billion in 2023 to approximately $18.8 billion by 2032, according to global research firm Astute Analytica. Regulatory cooperation between South Korea and the Middle East has strengthened in recent years. Last year, South Korea’s Ministry of Food and Drug Safety signed a memorandum of understanding with the UAE’s Emirates Drug Establishment, marking its third such agreement in the region after similar pacts with Iran and Saudi Arabia. 2025-02-26 14:04:15

HD Hyundai, Hanwha Ocean form alliance for naval vessel exports KSS-III submarine delivered by Hanwha Ocean/ Courtesy of Hanwha Ocean SEOUL, February 26 (AJP) - South Korea’s leading shipbuilders, HD Hyundai Heavy Industries and Hanwha Ocean, have set aside years of fierce competition to collaborate on exporting naval vessels, a move aimed at expanding their presence in the lucrative global defense market. The companies signed a memorandum of understanding on Tuesday at the headquarters of the Defense Acquisition Program Administration in Gwacheon. Under the agreement, HD Hyundai will take the lead in exporting surface vessels, while Hanwha Ocean will oversee submarine exports, leveraging their respective areas of expertise. The partnership follows a setback for both firms last year, when they failed to secure a contract for Australia’s new frigate program, an estimated 10 trillion won ($6.99 billion) project. The deal ultimately went to consortiums from Japan and Germany, which had submitted unified bids. HD Hyundai has produced 102 surface vessels for naval applications, while Hanwha Ocean has built 23 submarines, making them the country’s foremost shipbuilders in their respective categories. The collaboration could position the companies to capitalize on the $1.11 trillion U.S. naval vessel market. A bill introduced in the U.S. Congress would allow South Korean shipyards to construct American warships, a potential breakthrough for the industry beyond its traditional role in maintenance contracts. Analysts also expect the partnership to accelerate progress on South Korea’s next-generation destroyer program, known as KDDX, an 8 trillion won initiative aimed at bolstering the country’s naval capabilities and strengthening its defense industrial base. 2025-02-26 10:27:41

Hyundai Rotem secures $1.53 billion contract to supply trains to Morocco A Hyundai Rotem train/ Courtesy of Hyundai Rotem SEOUL, February 26 (AJP) - Hyundai Rotem, a subsidiary of Hyundai Motor Group, has signed a landmark $1.53 billion contract to supply double-decker electric trains to Morocco, the company announced Wednesday. The deal, the largest in the company's history, marks Hyundai Rotem’s first entry into the North African market. The agreement, signed Tuesday with Morocco’s national railway operator, surpasses the firm’s previous high-profile contracts in Australia and the United States. Under the deal, Hyundai Rotem will deliver trains capable of reaching speeds of up to 160 kilometers per hour, bolstering Morocco’s rail network ahead of the 2030 FIFA World Cup. The new fleet will primarily serve routes centered around Casablanca, one of the country’s key transportation hubs. The contract was secured through South Korea’s “One-Team Korea” initiative, a government-backed strategy that combines diplomatic engagement with financial support, the company said. The initiative played a critical role in outmaneuvering European competitors, particularly during last year’s Korea-Africa Summit, where South Korean officials sought to deepen economic ties with the continent. As part of the agreement, Hyundai Rotem will collaborate with Korea Railroad Corp. (KORAIL) to provide maintenance services and technology transfer programs. KORAIL is negotiating a separate arrangement with Moroccan authorities to facilitate training programs for local railway personnel. The project is also expected to generate significant economic benefits within South Korea. Hyundai Rotem said approximately 90 percent of the train components will be sourced from more than 200 Korean small and medium-sized enterprises. “This contract is a testament to the growing international recognition of South Korea’s railway technology,” a Hyundai Rotem representative said in a statement. He added the firm will continue to compete with European and Chinese manufacturers for major infrastructure projects worldwide. 2025-02-26 10:11:54

US to impose hefty fees on Chinese vessels, possibly benefiting South Korean shipbuilders SEOUL, February 25 (AJP) - The U.S. is poised to impose massive fees on Chinese vessels entering American ports, a move that would benefit South Korean shipbuilding and shipping industries. The Office of the United States Trade Representative (USTR) abruptly announced plans last week that Chinese shipping companies and vessels manufactured in China will face fees up to $1 million per ship or $1,000 per ton of cargo when entering U.S. ports. Non-Chinese shipping companies using Chinese-built vessels could be charged up to $1.5 million per entry. The upcoming measure will be finalized after a public hearing by the U.S. International Trade Commission (USITC) scheduled for next month. The measure stems from an investigation conducted during the previous administration, which concluded that Beijing's maritime dominance "displaces foreign firms, deprives market-oriented businesses and their workers of commercial opportunities, and lessens competition and creates dependencies on China, increasing risk and reducing supply chain resilience," according to the USTR. This move has already begun reshaping industry landscapes. According to shipping trade journal TradeWinds early this month, German shipping giant Hapag-Lloyd is in the final stages of negotiations to place an order six LNG dual-fuel container ships worth about $1.2 billion from Hanwha Ocean instead of Chinese shipbuilders. South Korean shipping companies including HMM, which handles the largest domestic volume of U.S. shipping cargos while maintaining only 2 percent of Chinese-built vessels in its fleet, are expected to benefit if Chinese shipping companies reduce operations on U.S. routes or if shipping rates increase due to decreased supplies. 2025-02-25 17:40:20

BOK lowers key rate by quarter point SEOUL, February 25 (AJP) - The Bank of Korea (BOK)'s monetary policy board lowered its benchmark interest rate by a quarter percentage point to 2.75 percent on Tuesday. The first rate cut of the year comes as part of efforts to stimulate the struggling domestic economy and follows BOK Governor Rhee Chang-yong's remarks last month, when he decided to keep the rate unchanged, that lowering the interest rate "would be an obvious choice." Since October last year, the BOK has shifted toward monetary easing with multiple rate cuts for the first time since the global financial crisis in the late 2000s, when it lowered rates six consecutive times. The reversal in rate policies comes amid worsening economic conditions, with last year's GDP growth reaching just 2 percent, below the central bank's projected 2.2 percent. The previous quarter's sluggish 0.1 percent growth rate was a particular concern, as it showed no improvement, seeing a 3.2 percent decline in construction investment. The central bank also lowered its economic growth outlook for this year to 1.5 percent from 1.9 percent, citing concerns over the U.S.'s harsh tariff offensives under President Donald Trump, who began his non-consecutive second term earlier this year, as well as domestic political instability following President Yoon Suk Yeol's martial law debacle late last year. The downward revision aligns with other forecasts, as the state-run Korea Development Institute (KDI) recently lowered its growth outlook to 1.6 percent from 2.0 percent, in line with projections from international investment banks. The weak South Korean won is further signaling a gloomy financial downturn ahead, as it drastically weakened past 1,400 won against the greenback in recent trading, the weakest level since the political turmoil caused by the Dec. 3 martial law declaration. "If the U.S. keeps its rates steady, the widening interest rate gap between the two countries may cause problems," said Jang Min, a senior researcher at the Korea Institute of Finance, as foreign investors seek higher yields elsewhere, potentially driving up import costs and fueling inflation if the won continues to weaken. 2025-02-25 15:26:30

Gov't extends support measures until March as veg prices continue to skyrocket SEOUL, February 25 (AJP) - As vegetable prices have surged due to supply shortages from extreme weather this winter, discount programs for agricultural produce will be extended to ease the burden on consumers, the Ministry of Agriculture, Food and Rural Affairs said on Tuesday. The ministry has offered discount programs of up to 40 percent off the prices of cabbage, radish, carrots, and other vegetables, set to expire on Wednesday. But these measures have now been extended until March. According to the Korea Agro-Fisheries & Food Trade Corporation (aT) on Tuesday, retail prices of cabbage, primarily used for pickled, spicy cabbage dish known as kimchi, reached 5,195 won (US$3.63) per head on Monday, up 36.2 percent on-year, and 26.4 percent higher than the three-year average. For radish, another key ingredient in many Korean dishes, prices saw an even steeper climb, selling at 3,241 won per bunch — an 80.4 percent increase from last year and 80.8 percent higher than average levels. "Unusually high temperatures in September and October last year, along with heavy rainfall, damaged crops during the harvest season, while winter snowstorms and cold snaps stunted growth in major farming regions, including South Jeolla Province and Jeju Island," an official from the Ministry of Agriculture, Food and Rural Affairs explained. The official added that such extreme weather conditions have reduced vegetable harvests by 12 to 18 percent, while also driving up prices for cabbage and carrots by more than 40 percent compared to average years. The ministry will also encourage private imports, allowing the aT to directly purchase imported cabbage and radishes for distribution to wholesale markets and kimchi producers. Additionally, about 500 tons of government-stockpiled radishes will be supplied to major supermarkets at 70 percent of wholesale prices to help stabilize the market. 2025-02-25 11:36:09