UPDATE: Korea's factory output rebounds on chips, domestic front remains slack *Updated with additional information and market response SEOUL, December 30 (AJP) - South Korea’s factory output rebounded in November after two consecutive monthly contractions, supported by a sharp pickup in semiconductor production and increased facility investment linked to AI-driven chip demand, government data showed Tuesday. Mining and manufacturing output rose 0.6 percent from the previous month, reversing declines of 4.2 percent in October and 1.0 percent in September, according to the Ministry of Data and Statistics. Factory activity heavily reliant on semiconductors The rebound largely owed to a 7.5 percent jump in semiconductor output and external demand. Output for export shipments climbed 4.6 percent, while production for domestic sales fell 4.5 percent. The report went largely unnoticed by the Korean markets on their last trading day for 2025. KOSPI was 0.2 percent lower at 4,212.61 as of 11:25 a.m. and the U.S. dollar at 1,434.40 won. By sector, pharmaceutical exports surged 23.7 percent from the previous month, while semiconductor exports rose 11.7 percent. In contrast, refined petroleum exports declined 4.1 percent as the petrochemical industry remained mired in a prolonged downturn. Overall industrial production increased 0.9 percent from October, compared with a 2.7 percent drop a month earlier. Service-sector output edged up 0.7 percent, but retail sales slid 3.3 percent, reflecting persistent weakness in private consumption. Facility investment rose 1.5 percent on month, led by machinery investment. The increase was driven by higher spending on precision equipment, including semiconductor inspection tools, as chipmakers expanded capacity to meet AI-driven demand. Manufacturing shipments climbed 1.6 percent from the previous month. Semiconductor shipments surged 12.1 percent on month and 9.1 percent on year, while machinery equipment shipments rose 3.5 percent and 2.3 percent, respectively. Output of “other transport equipment,” dominated by shipbuilding, fell 12.4 percent on month but remained on an upward trajectory year on year, rising 17.3 percent, reflecting the start of full-scale deliveries of LNG carriers ordered under Qatar-related projects. Manufacturing inventories increased 0.6 percent from the previous month. Semiconductor inventories, however, plunged 42.6 percent from a year earlier, reflecting aggressive stockpiling amid fears of supply shortages driven by AI demand. By contrast, inventories of electrical equipment such as batteries rose 12.6 percent on month, while output in the sector fell 8 percent on year, signaling accumulation amid the prolonged electric-vehicle slowdown and repeated overseas order cancellations faced by LG Energy Solution. Refined petroleum inventories also climbed 9.9 percent, pointing to continued weakness in the petrochemical industry. Construction rebound masks deep structural slump Construction output rose 6.6 percent from the previous month, largely due to a higher number of working days compared with October, which included the Chuseok holiday, as well as year-end project completions. Building construction increased 9.6 percent on month, while civil engineering output fell 1.1 percent. On a yearly basis, however, the sector remained deeply depressed. Building construction dropped 16.1 percent from a year earlier, while civil engineering fell 19.7 percent, effectively wiping out nearly one-fifth of last year’s activity. The downturn reflects weak orders throughout 2024, driven by high interest rates and elevated construction costs. Construction orders continued to shrink, falling 9.2 percent on year. Civil engineering orders, including power plants and communication facilities, plunged 17.3 percent, while building orders declined 7.3 percent, pointing to ongoing disruptions in housing supply. The weakness also spilled into services. Real estate-related services, centered on brokerage activity, fell 2.4 percent as tighter debt service ratio (DSR) regulations and supply constraints weighed on transactions. This made real estate the only major service category to contract, even as overall service output rose 3 percent on year. Consumers pull back as financial activity surges Retail sales reversed course, falling 3.3 percent on month after a temporary October rebound fueled by holiday demand. Sales of non-durable goods such as food declined 4.3 percent amid rising prices, while semi-durable goods like clothing dropped 3.6 percent. Durable goods sales, including communication devices and computers, also fell 0.6 percent, following a spike in general-purpose semiconductor prices in November. By retail channel, sales at supermarkets and department stores dropped 4.8 percent and 8.3 percent on year, respectively, underscoring continued pressure on household spending. In contrast, the financial sector continued to expand on buoyant equity trading. Output in finance and insurance rose 2.2 percent from the previous month and 4.2 percent from a year earlier. The combined daily average trading value of the KOSPI and KOSDAQ reached 38 trillion won ($26.2 billion) in November, more than double the level a year earlier. Margin trading also exceeded 26 trillion won as of Nov. 28, highlighting a growing polarization in the economy — with capital increasingly concentrated in financial markets while consumption, construction and real estate remain subdued. 2025-12-30 09:30:29

DP, PPP at odds over probe into Unification Church-related allegations SEOUL, December 30 (AJP) - The ruling Democratic Party (DP) and the main opposition People Power Party (PPP) remain at odds over the scope of a proposed probe by independent prosecutors into bribery allegations involving the Unification Church, also known as the Moonies. Their talks were further bogged down by the DP's demand to include suspicions involving another dubious religious sect Shincheonji, despite the party's initial opposition to the probe. DP leader Jung Chung-rae said earlier this week that the probe should cover Shincheonji, citing suspicious activities by the sect. He seemed to be referring to allegations that a large number of the sect's followers joined the PPP during the 2021 presidential primary to support a specific candidate. He further pressed the PPP, saying that the DP had already drafted a bill to allow an independent third party to select prosecutors for the probe. But the PPP criticized the DP for including Shincheonji's alleged involvement only while excluding DP-related allegations, calling it a "trick" to accept the probe in appearance, only to avoid it eventually. PPP leader Jang Dong-hyuk said that if there is enough evidence, allegations related to Shincheonji could be investigated without a special probe. PPP leader Jang Dong-hyuk said that allegations related to Shincheonji could be investigated without a special probe if there is enough evidence. However, he argued that allegations involving the Unification Church are a different matter, as independent prosecutors dismissed testimony implicating political figures from the DP in related incidents. Jang urged the DP not to "water down" the issue in order to buy time and shift responsibility to the PPP. He has reportedly been considering hardline steps including a hunger strike if the two parties fail to reach a deal by Tuesday. 2025-12-30 09:20:22

Samsung Electronics taps AI startup Nota for next Exynos mobile chip SEOUL, December 30 (AJP) - South Korean artificial intelligence software firm Nota has signed a contract with Samsung Electronics to embed its AI model optimization technology in the latter's next mobile application processor, the Exynos 2600. The deal, announced Tuesday, follows an earlier agreement covering the Exynos 2500, extending a partnership aimed at boosting on-device AI performance in Samsung’s flagship chipsets. Nota, led by Chief Executive Chae Myung-soo, said its AI optimization platform, NetsPresso, can shrink AI model sizes by more than 90 percent while preserving accuracy. Samsung selected Nota again to help maximize performance and efficiency in its next strategic mobile processor, the company said. As part of the collaboration, Nota will participate in developing the next version of Samsung’s in-house toolchain, Exynos AI Studio. The company said it will focus on maintaining precision so that large generative AI models can run smoothly on smartphones and other devices without relying on cloud connectivity. Nota also plans to further automate the optimization pipeline, allowing developers to deploy the latest AI models more quickly within the Exynos ecosystem. Devices powered by the Exynos 2600, including upcoming Galaxy smartphones, are expected to offer faster and more powerful on-device AI capabilities. “This collaboration, which has continued since the Exynos 2400, demonstrates that Nota’s technology delivers tangible value when combined with Samsung’s hardware,” Chae said in a press release. Nota said it is expanding its business beyond mobile chips into areas such as robotics, home appliances and autonomous driving, leveraging lightweight AI model technology developed over the past decade. 2025-12-30 09:10:49

Nota to supply AI optimization tech for Samsung's next-gen Exynos 2600 chip SEOUL, December 30 (AJP) - Korean AI model optimization firm Nota AI said Tuesday it has signed an agreement with Samsung Electronics to supply AI optimization platform technology for the tech giant's next-generation mobile application processor, the Exynos 2600. The deal marks a consecutive contract for Nota, following its previous partnership for the Exynos 2500. Under the agreement, Nota will participate in developing the next version of Samsung's proprietary toolchain, Exynos AI Studio. Nota's hardware-aware AI optimization platform, NetsPresso, is capable of reducing AI model sizes by up to 90 percent while maintaining accuracy. The technology is designed to enable large-scale generative AI models to run smoothly on mobile devices without cloud connectivity. The partnership will also focus on automating optimization pipelines, allowing developers to implement the latest AI models in the Exynos environment more efficiently. "This collaboration, which has continued since the Exynos 2400, proves that Nota's technology is creating tangible value when combined with Samsung hardware," Nota AI CEO Chae Myung-su said. The Exynos 2600 is expected to power Samsung's upcoming Galaxy smartphone lineup. 2025-12-30 08:42:37

Coupang falls under pan-government scrutiny in Seoul despite remedy program SEOUL, December 30 (AJP) -The South Korean government maintained that it will press ahead with a sweeping investigation into Coupang despite the e-commerce giant’s announcement of a large-scale compensation plan, vowing to leave “not a single suspicion” unresolved over a massive data breach affecting nearly all of its 34 million users. Deputy Prime Minister and Minister of Science and ICT Bae Kyung-hoon, who chairs a pan-government task force on the case, on Monday said the incident would be treated not only as a cybersecurity failure but also as a potential case of serious legal violations and corporate irresponsibility. “A company that has grown on the public’s trust cannot justify behavior that evades responsibility,” Bae said at a task force meeting. He said the leak of personal information involving “more than 30 million” domestic users constitutes a clear violation of the Korean law, adding that authorities will act “strictly and without exception” if wrongdoing is confirmed, applying the same standards used for all companies. The stern stance was reaffirmed after Coupang announced a 1.7 trillion won compensation plan that drew more backlash than sympathy. Coupang offered to compensate users affected by the breach with vouchers worth 50,000 won ($35) each, following mounting criticism over its handling of the incident. The total compensation package amounts to 1.685 trillion won ($1.17 billion) to cover paid subscribers as well as non-subscribers and those who closed their accounts, according to Coupang. The vouchers will be split across multiple services on the platform: 5,000 won usable for Rocket Delivery, Rocket Direct Purchase, Seller Rocket and Marketplace purchases, 5,000 won for Coupang Eats, 20,000 won for Coupang Travel, and 20,000 won for R.LUX, the company’s luxury goods platform. The compensation plan, however, has drawn mixed reactions, with consumers questioning whether vouchers — rather than cash — adequately address potential harm from a breach involving sensitive personal data. The move also comes amid mounting scrutiny over the company’s broader governance and compliance practices. The government has formed an unusually large interagency task force involving 11 bodies: the Personal Information Protection Commission, National Police Agency, Fair Trade Commission, Financial Services Commission, National Intelligence Service, Korea Communications Commission, Ministry of Employment and Labor, Ministry of Land, Infrastructure and Transport, National Tax Service, Ministry of Foreign Affairs, and the Ministry of SMEs and Startups. Officials said such a broad joint response for a single company is rare, describing the case as a test of Korea’s ability to protect personal data in the platform economy while ensuring worker safety and fair market order. Under the coordinated probe, authorities plan to apply pressure through investigations, penalties and possible policy reforms. The science ministry will analyze the technical causes of the breach and vulnerabilities in Coupang’s security systems. The Personal Information Protection Commission will determine the precise scope of leaked data and whether the company violated the Personal Information Protection Act. Police will analyze seized materials and work with overseas agencies to identify suspects. The Financial Services Commission will review risks of fraudulent transactions stemming from the leak, including whether consumers were steered toward high-interest financial products. The Fair Trade Commission said it is considering sanctions — including possible business suspension — while assessing risks of identity theft and broader consumer harm. The Fair Trade Commission and the Korea Communications Commission are also investigating whether Coupang’s membership cancellation process violates the E-Commerce Act or the Telecommunications Business Act, including the possible use of so-called “dark patterns” that make it difficult for users to cancel subscriptions. Labor authorities will conduct on-site inspections into overnight work conditions and whether adequate measures were in place to protect workers’ health. The transport ministry said it will work with the National Assembly’s Euljiro Committee to prepare institutional measures to improve conditions for Coupang delivery workers. “This case goes beyond personal data,” Bae said. “It concerns public safety, fundamental rights and corporate responsibility.” He added that the government will respond “as one team” and pursue the investigation through to the end so the public can feel safe. * This article, published by Aju Business Daily, was translated by AI and edited by AJP. 2025-12-30 08:02:57

Korea's Hanwha Aerospace signs $4 bn third-stage Chunmoo deal with Poland SEOUL, December 30 (AJP) -South Korean defense company Hanwha Aerospace has signed a third-stage contract for its multiple rocket launcher system with Poland’s arms procurement authority, enabling the European country to domestically produce guided rockets under a joint manufacturing framework. The 5.6 trillion won ($4 billion) agreement, covering 80-kilometer-range guided missiles, was signed Monday at the Warsaw Military Museum between Hanwha WB Advanced Systems — a joint venture between Hanwha Aerospace and Poland’s WB Electronics — and the Polish government. Senior officials and defense industry executives from both countries attended the ceremony. The joint venture, established in October, was created to localize production of the Chunmoo multiple rocket launcher system customized for Poland. Under the deal, Poland will acquire the capability to manufacture rockets domestically for its Homar-K system, a Polish variant of South Korea’s Chunmoo. Polish Defense Minister Władysław Marcin Kosiniak-Kamysz said the agreement turns “independence in rocket production into reality” and marks a turning point for Poland as it moves toward becoming a co-producer of advanced rocket systems rather than a simple buyer. “Homar-K is becoming a truly joint system,” he said, highlighting the strategic significance of technology transfer and local industrial participation. Chunmoo is South Korea’s home-grown multiple rocket launcher system capable of firing 12 rockets in under a minute from a single launcher. It has emerged as one of Korea’s most successful defense exports amid Europe’s push to expand artillery and missile capabilities following Russia’s invasion of Ukraine. The latest contract follows two earlier agreements signed between Seoul and Warsaw. The first, concluded in 2022, was dvalued at 5.0357 trillion won, while the second, signed last year, amounted to 2.2 trillion won. Together with the latest deal, total Chunmoo-related contracts with Poland now exceed 12.8 trillion won. President Lee Jae Myung’s chief of staff, Kang Hoon-sik, traveled to Warsaw to attend the signing ceremony, underscoring the deal’s diplomatic and strategic importance. Poland has become one of South Korea’s largest defense partners in Europe, purchasing a wide range of military equipment including K2 tanks, K9 self-propelled howitzers and FA-50 fighter jets, as Seoul positions itself as a major global arms supplier through co-production and long-term industrial partnerships. * This article, published by Aju Business Daily, was translated by AI and edited by AJP. 2025-12-30 07:20:07

PHOTOS: Frontline vigilance — S. Korean troops brave extreme cold at border SEOUL, December 29 (AJP) — Amidst the bone-chilling winter at the North Korean border, South Korean military operations remain in constant motion, maintaining a 24-hour watch despite plummeting temperatures. At the heart of this defense is the General Outpost (GOP), a network of strategic surveillance positions situated approximately 2 kilometers south of the Military Demarcation Line (MDL). Tasked with monitoring the volatile frontier, GOP units manage a vast expanse of rugged terrain where accessibility is often restricted. The core mission involves relentless patrols and rigorous inspections of the barbed-wire fences that trace the border. To bolster these efforts, the military has integrated quadrupedal robots into its pilot programs. These "robot dogs" provide critical auxiliary surveillance in high-risk zones that are difficult for human soldiers to navigate. The intensity of the mission is underscored by the harsh climate. Pre-dawn patrols are conducted in temperatures averaging -10 degrees Celsius, though biting winds often push the perceived temperature down to -20 degrees Celsius. Despite these extreme conditions, the commitment to frontline security remains unwavering. 2025-12-29 17:56:18

Korean stock market reclaims the 4,200 level SEOUL, December 29 (AJP) - While Asian markets were mixed—with Japan slightly down and China remaining flat—Korean stocks rose sharply. In Seoul, the benchmark KOSPI climbed 2.2 percent to close at 4,220 on Monday, while the KOSDAQ gained 1.4 percent to end at 932.59. It was the first time since Nov. 3 that the KOSPI closed above the 4,200 mark. The current level is just one point below the record high of 4,221.87 set on that date. Both Samsung Electronics and SK hynix hit new record closing highs. Samsung Electronics rose 2.1 percent to 119,500 won ($83.4), and SK hynix jumped 6.8 percent to 640,000 won. SK hynix’s sharp rise was driven by expectations of a memory semiconductor supercycle, along with the lifting of its "investment warning" designation, which eased supply-demand concerns and attracted buying. Lee Kyung-min, an analyst at Daishin Securities, said, "With recent positive momentum such as expectations for a memory supercycle continuing, both SK hynix and Samsung Electronics rose together," adding that "the strength of these two semiconductor leaders led the KOSPI’s gain." Samsung Biologics gained 0.8 percent to 1,706,000 won, Hyundai Motor rose 2.6 percent to 293,500 won, HD Hyundai Heavy Industries added 2.2 percent to 523,000 won, and Doosan Enerbility climbed 3.9 percent to 76,500 won. Hanwha Aerospace surged 9.1 percent to 949,000 won. The stock’s jump was attributed to news that the company signed a 103.3 billion won ($72 million) contract with the Korea Aerospace Research Institute to develop a "lunar lander propulsion system" scheduled for launch in 2032, and to its removal from the investment warning list. LG Energy Solution, the third-largest by market capitalization, fell 0.9 percent to 380,000 won. Most entertainment stocks advanced. HYBE gained 1.8 percent to 320,000 won, SM added 2.9 percent to 128,000 won, YG increased 0.3 percent to 64,700 won, while JYP was unchanged. In Tokyo, the Nikkei 225 fell 0.4 percent to 50,526.92. In China, the Shanghai Composite Index rose 1.60 points to 3,945.28. 2025-12-29 17:47:25

Korean banks' fight for deposits deepens as rate inversion signals liquidity strain SEOUL, December 29 (AJP) - South Korean banks are raising deposit rates aggressively to stem an outflow of funds into buoyant stock markets at home and abroad, triggering an unusual inversion in short-term deposit yields and adding pressure to already strained borrowers. The competition for liquidity has pushed both lending and deposit rates higher, even as the Bank of Korea keeps its policy rate on hold. According to data released Monday by the central bank, the average interest rate on new bank loans rose 0.13 percentage point in November to 4.15 percent, reversing a three-month decline. Household loan rates climbed 0.08 percentage point to 4.32 percent, while corporate loan rates rose 0.14 percentage point to 4.10 percent. Household rates reached a seven-month high, and corporate rates turned upward for the first time in six months. Jeonse (long-term rental deposit) loan rates — closely tied to household living costs — also increased for a second straight month, rising 0.12 percentage point to 3.90 percent. Short-term rates jump as banks scramble for liquidity The upward pressure is most visible in short-term lending and deposit products, reflecting banks’ urgent need to secure liquidity. General credit loan rates jumped 0.27 percentage point to 5.46 percent, while mortgage rates rose 0.19 percentage point to 4.17 percent, their biggest November increase in four years and the first return to the 4 percent range in eight months. Banks have been raising add-on rates preemptively following the government’s Oct. 15 real estate measures, which tightened “stressed debt service ratio (DSR)” rules. At the same time, short-term market yields have climbed after the Bank of Korea maintained a hawkish tone while keeping its benchmark rate unchanged. The one-year bank bond yield rose 0.27 percentage point in November, outpacing the 0.18 percentage point increase in five-year yields. As a result, loans tied to short-term rates — especially general credit loans — saw the steepest increases. Despite rising borrowing costs, the share of fixed-rate household loans continued to fall. Fixed-rate loans accounted for 54.6 percent of household lending in November, down 1.6 percentage points from the previous month and marking a fourth consecutive decline. Within mortgage loans, the fixed-rate share dropped 3.8 percentage points to 90.2 percent, suggesting borrowers are increasingly betting on future rate cuts after perceiving that interest rates have peaked. SMEs face heavier burden as risk premiums widen Small and medium-sized enterprises are bearing a disproportionate share of the tightening. SME lending rates rose 0.18 percentage point to 4.14 percent, compared with a 0.11 percentage point rise for large corporations, whose average rate stood at 4.06 percent. The wider gap reflects rising risk premiums tied to concerns over SME creditworthiness. Bank of Korea data show that so-called “marginal firms” — companies unable to cover interest payments with operating profits — accounted for 18.0 percent of SMEs in 2024, well above the 13.7 percent recorded among large corporations. Deposit rates overtake savings banks for first time since 1998 On the funding side, deposit rates rose 0.24 percentage point to an average of 2.81 percent in November, outpacing the increase in lending rates and narrowing banks’ net interest margin on new transactions by 0.11 percentage point to 1.34 percent. A notable development is that commercial bank deposit rates have surpassed those offered by savings banks for the first time in roughly 27 years, since the 1998 Asian financial crisis. The reversal reflects sharply diverging strategies: savings banks, constrained by exposure to troubled real estate project financing and weak loan demand, have frozen or lowered rates, while major banks have raised them aggressively to prevent capital outflows. An inversion has also emerged within deposit maturities themselves. According to the Korean Statistical Information Service, the average rate on deposits with maturities under six months stood at 2.58 percent, higher than the 2.43 percent offered on deposits with maturities of two to three years — a clear signal of banks’ urgency to secure short-term funds. Funds flow accelerates from deposits to markets The liquidity squeeze is being amplified by a massive shift of household money into financial markets. Data from the Korea Financial Investment Association show inflows into public offering funds reached about 66.8 trillion won ($46.6 billion) as of Sunday, more than triple last year’s 22 trillion won. The surge underscores how capital is rapidly migrating from bank deposits into equities and investment products, intensifying competition among banks for funding and helping explain the sharp rise in short-term deposit rates. 2025-12-29 17:43:02

PHOTOS: One year after deadly Jeju Air disaster SEOUL, Dec. 29 (AJP) — South Korea on Monday marked one year since a Jeju Air passenger jet crashed during an emergency landing, killing 179 people in one of the country’s deadliest aviation disasters. Jeju Air Flight 7C2216, a Boeing 737-800 traveling from Bangkok, struck a concrete localizer structure while attempting to land at Muan International Airport in South Jeolla Province at 9:03 a.m. on Dec. 29 last year. Of the 181 people on board, 179 were killed and two others were injured. On the first anniversary of the tragedy, bereaved families and members of the public left messages of remembrance at a digital memorial space set up at Seoul Station. Temporary memorial altars were also installed by local governments and at airports nationwide, where mourners gathered to pay tribute to the victims. The government and Jeju Air issued statements expressing condolences to the families of those killed and reaffirmed their commitment to strengthening aviation safety measures to prevent similar accidents. 2025-12-29 17:41:07