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Half of Stocks Decline Despite Upgrades from Brokerages Brokerage firms' investment opinions have not served as a reliable guide for stock prices. Approximately half of the stocks that received upgraded ratings from brokerages subsequently saw their prices decline. Conversely, about one in three stocks that received downgrades experienced price increases.According to data from FnGuide, an analysis of stock price movements for companies that received either upgrades or downgrades from brokerages this year, up to August 12, revealed these trends.Brokerages typically provide target prices along with their investment opinions, but in the market, changes in investment opinions are often viewed as more direct signals for investors than target price adjustments. While target price changes frequently occur due to shifts in earnings forecasts or valuation changes, a change in investment opinion is interpreted as a fundamental shift in the brokerage's investment judgment regarding that stock. Notably, brokerages tend to be reluctant to issue 'sell' ratings, leading to downgrades being interpreted as de facto sell signals.Among the 242 stocks that received upgrades, 127 saw their prices rise on the day the report was published, accounting for 52.5% of the total. In contrast, 110 stocks (45.5%) experienced price declines, while 5 stocks (2.1%) remained unchanged. The average increase for the rising stocks was 6.2%, whereas the average decline for the falling stocks was greater at 8.11%.Looking at the situation over time, the results were not significantly different. As of the closing prices on August 12, only 119 stocks (49.2%) that received upgrades saw their prices increase, while 122 stocks (50.4%) declined. One stock (Dongyang Life) was halted after experiencing a drop. Thus, more than half of the stocks that received upgrades ultimately saw their prices fall. The average increase for the rising stocks was 29.7%, while the average decline for the falling stocks was 21.0%.In contrast, the directionality for stocks that received downgrades was relatively clear. Among the 114 downgraded reports, 79 stocks (69.3%) saw their prices fall on the day the report was published. Meanwhile, 33 stocks (28.9%) increased, and 2 stocks (1.8%) remained unchanged. The average decline for the falling stocks was 5.2%, while the average increase for the rising stocks was 5.4%. As of the closing prices on August 12, 78 stocks (68.4%) that received downgrades fell, while 36 stocks (31.6%) increased. The average increase for the rising stocks was 21.2%, which was similar to the average decline of 22.1% for the falling stocks.* This article has been translated by AI. 2026-08-17 18:32:00 -
Investors Struggle with Diverging Stock Predictions Amid Market Volatility Brokerage firms are presenting widely varying forecasts, not only in investment opinions but also in target prices and KOSPI projections. Just two months ago, many brokerages were optimistic about a rising KOSPI, but they have recently begun to lower their target prices, with some individual stock targets diverging by more than three times.According to financial information provider FnGuide, reports released over the past three months show a staggering difference in target prices for SK Hynix, ranging from 1.48 million won to 4.7 million won, a gap of 3.22 million won. The highest target price is 3.18 times the lowest. Samsung Electronics also shows a difference of 300,000 won to 650,000 won, a 2.17-fold variation. Other major stocks in the KOSDAQ market, such as SK Square, Samsung Electro-Mechanics, and Samsung SDI, also exhibit target price discrepancies exceeding twofold.Not only are individual stock forecasts diverging, but overall market outlooks from brokerages are also markedly different. Daishin Securities recently revised its KOSPI forecast for the year from 11,500 points to the 9,300 range, citing rising bond rates and the potential for further rate hikes, which led to a reduction in the target price-to-earnings ratio (PER) for semiconductors from 8 to 7. This adjustment also reflects a sharp upward revision in earnings expectations for non-semiconductor sectors. With the export momentum outside of semiconductors just beginning to recover, the likelihood of further valuation expansion appears limited.Shinhan Investment Corp. adjusted its forecast on July 30, lowering its previous estimate of 11,000 points to 8,300 points for the third quarter and 8,800 points for the second half of the year, factoring in interest rate hikes and changes in earnings per share (EPS). Kiwoom Securities noted that the current earnings season for the second and third quarters is reaffirming the reliability and visibility of semiconductor profits, predicting a return to the historical valuation band lower limit of 9,000 points by year-end.While domestic brokerages are consistently lowering their forecasts, global investment banks remain optimistic about the South Korean stock market. Goldman Sachs stated on August 4 that the current KOSPI market reflects excessive pessimism compared to fundamentals, maintaining a 12-month target index of 12,000 points. Morgan Stanley also kept its target of 9,000 points while suggesting a short-term range of 5,500 to 10,500 points. JP Morgan, on July 21, reiterated its 'overweight' opinion on the KOSPI with a 12-month target of 12,500 points. This marks a stark contrast in market outlooks within just a few months.The challenge for investors lies in the tendency to accept KOSPI forecasts and target prices as definitive investment criteria. In an unclear market direction, extreme variations in predictions from different brokerages make it difficult for investors to determine which figures to trust.Industry experts explain that the significant differences in target prices arise from varying assessments of a company's future performance and appropriate valuations. Baek Young-chan, head of the research center at Sangsangin Securities, noted that the methods used to calculate target prices differ among brokerages. Some may apply discounted cash flow (DCF) methods, while others might use relative valuation metrics like PER or price-to-book ratio (PBR).Additionally, differences in earnings estimates are a key variable influencing target prices. Baek stated, “The methods of estimating profits may vary, and even for the same company, differing estimates of operating profit can lead to discrepancies in EPS and, consequently, target prices.”In a volatile market like this year, where stock prices have fluctuated sharply in a short period, it has become increasingly challenging to determine appropriate stock prices using traditional valuation methods.Choi Hyun-jae, head of the research center at Yuanta Securities, remarked, “If there had not been significant market volatility, such discrepancies in target prices would not have occurred. In this instance, across all sectors, particularly in IT, robotics, and shipbuilding, analysts using their traditional tools to set target prices have found it meaningless in the market conditions that persisted until July.”He added, “Analysts’ target prices are officially set as 12-month targets, and while they may not react sensitively to fluctuations, they also consider long-term perspectives, which can lead to time lags in their assessments.”* This article has been translated by AI. 2026-08-17 18:32:00
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SK Hynix Accelerates Semiconductor Expansion in Yongin and Cheongju The South Korean government is emphasizing the early operation of semiconductor production facilities, and SK Hynix is accelerating its capacity expansion in Yongin and Cheongju. Following the advancement of the first cleanroom operation at the Yongin phase one fab, the company is also starting construction on phase two. In Cheongju, after the early operation of the next-generation DRAM production line, the company is expanding its advanced packaging production facilities. This investment surge by the company aligns with the government's push for rapid semiconductor infrastructure development in response to AI memory supply shortages.According to industry sources on August 17, SK Hynix plans to open the first cleanroom of its semiconductor cluster phase one in Yongin's Cheoin-gu, Wonsam-myeon, in February 2027, three months earlier than the initially scheduled May. Approximately 31 trillion won is being invested in the construction of phase one. Cleanrooms for phases two to six are planned to be built sequentially by the end of 2030.Construction is also underway for phase two at the Yongin site. SK Hynix began the foundation work for phase two in April and plans to start building construction this month. Phase two will include three cleanrooms, which the company aims to use as a foundation for future capacity expansion.The government continues to push for expedited semiconductor production facility construction. President Lee Jae-myung emphasized during a public-private joint inspection meeting on July 6 that administrative procedures should be conducted concurrently rather than sequentially to save time. He pointed out that the progress of the Yongin semiconductor cluster project was not sufficient.SK Hynix is also accelerating its investment in Cheongju. The Cheongju M15X cleanroom opened in October last year, ahead of schedule. Wafer input began in the first quarter of this year, and equipment installation is currently being carried out sequentially. Approximately 20 trillion won is being invested in M15X to secure next-generation DRAM production capacity, including high-bandwidth memory (HBM).Investments in both front-end and back-end processes are ongoing in Cheongju. SK Hynix is constructing an advanced packaging fab, P&T7, with an investment of 19 trillion won. Construction began in earnest in April, with a goal to complete the cleanroom by the end of 2027. P&T7 will serve as a back-end hub for packaging DRAM produced at M15X into HBM products.The acceleration of SK Hynix's investment schedules in Yongin and Cheongju is driven by the increasing demand for memory due to the expansion of AI data centers. The company recently announced that demand for advanced memory is rising due to the proliferation of AI learning, inference, and cloud services. As hyperscalers propose long-term investments in AI data centers, the demand for long-term supply contracts for AI memory, including HBM, is also growing.Yongin and Cheongju will have distinct roles in this expansion. Yongin will serve as a hub for large-scale front-end production capacity focused on HBM and premium DRAM, while Cheongju will produce next-generation DRAM at M15X and perform advanced packaging at P&T7. SK Hynix plans to link the production facilities in both regions to enhance its AI memory supply capabilities.As the government hastens the approval and infrastructure development for semiconductor production facilities, SK Hynix is also advancing the operational timelines of its existing production sites. Industry analysts suggest that the rapid increase in AI memory demand is making the timing of securing production facilities a competitive advantage.One semiconductor industry insider stated, "It has become crucial to supply the required quantities to customers when they need them, especially for HBM. The speed at which Yongin and Cheongju can secure production capacity will impact future supply responsiveness." 2026-08-17 18:16:00
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SK Hynix Achieves Rapid Inventory Turnover Amid Strong HBM Sales SK Hynix has established a 'rapid inventory turnover' structure that connects chip production directly to sales, driven by strong demand for high-bandwidth memory (HBM). The acceleration in sales has significantly increased inventory turnover rates, while also reducing the burden of inventory valuation losses, thereby enhancing the company's financial health.According to SK Hynix's semi-annual report released on August 17, the proportion of inventory assets to total assets decreased to 5.2% in the first half of the year, down from 8.1% at the end of last year. Although total inventory assets rose by 25.9% to 17.9857 trillion won from 14.2894 trillion won during the same period, the growth rate of sales has substantially outpaced the increase in inventory.The inventory turnover ratio also increased significantly from 2.8 to 3.1 in just six months. This metric indicates that the time chips spend in storage has been reduced.The rapid turnover is attributed to explosive sales growth. Revenue surged by 230.9%, rising from 39.8711 trillion won to 131.8950 trillion won, while the cost of goods sold increased by 36.2%, from 17.7858 trillion won to 24.2243 trillion won. The growth rates of both revenue and cost of goods sold have exceeded the rate of inventory increase, maximizing supply chain efficiency.The qualitative composition of inventory also shows a clear positive cycle. Work-in-progress inventory, rather than finished goods, increased by 20.3% year-on-year to 11.0788 trillion won. This indicates that the production lines for high-performance products like HBM, which have high process difficulty and long lead times, are operating at nearly 100% capacity. Instead of accumulating 'bad inventory' in warehouses, the company is seeing an increase in 'good inventory' that already has designated owners during production.As a result, the burden of inventory valuation losses has also decreased. The balance of the 'inventory valuation loss provision' for the first half of the year was 413.4 billion won, a 16.5% reduction from the end of last year, significantly lowering financial uncertainty.Industry experts note that the memory semiconductor business is rapidly transitioning from traditional 'bulk B2B' to 'pre-order based high-value B2B.' In the past, during downturns, accumulated inventory often led to substantial valuation losses, increasing financial burdens. However, the current HBM-focused structure allows for timely supply and minimal inventory, greatly enhancing resilience to market volatility.SK Hynix has secured long-term contracts based on pre-orders for next-generation HBM supply with major tech companies like NVIDIA. This structure ensures that sales channels and prices are established before production, particularly in the competitive landscape for high-performance memory for AI data centers. Given the nature of HBM, equipment investments and line operations are based on confirmed demand, significantly reducing inventory risk.An industry insider stated, "Pre-orders from big tech companies like NVIDIA, Microsoft, and Google for one to two years, and in some cases up to five years, have become the 'new normal' in the industry. Moving away from the old model of running fabs and accumulating inventory, the focus on confirmed quantities has been key to accelerating inventory turnover and maximizing profitability."* This article has been translated by AI. 2026-08-17 18:12:00
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Samsung Electronics Transitions 'NowTalk' to Real-Name System to Protect Personal Rights Samsung Electronics is shifting its internal communication platform, 'NowTalk', from an anonymous format to a full real-name system. This change aims to prevent defamation and the spread of false information while fostering a healthy organizational culture, in line with the amendments to the Information and Communications Network Act that took effect last month. According to industry sources on August 17, Samsung Electronics announced to its employees that starting at midnight on August 18, all posts and comments on NowTalk will require real names. NowTalk serves as a primary communication space for employees to share major company issues and policies. It has traditionally operated on an anonymous basis, allowing for free exchange of opinions. However, with the implementation of the revised Information and Communications Network Act on July 7, which significantly increased liability for violations of personal rights and the distribution of false or manipulated information, the internal communication method has undergone a complete overhaul. Samsung cited the rise in defamation and the spread of unverified rumors hidden behind anonymity as a reason for the transition, noting that the essence of internal communication had been compromised. In fact, incidents of verbal abuse and personal attacks on NowTalk have led to the company receiving a 'Workplace Harassment Improvement Guidance' order from the Ministry of Employment and Labor. Samsung stated, "This measure is aimed at protecting the personal rights and dignity of employees and creating a respectful communication environment." Existing posts and comments registered before the implementation of the new system will not be retroactively applied to real names. Additionally, the posting and viewing functions through the 'NOW' menu on the main screen will remain unchanged. Following the introduction of the real-name system, Samsung plans to continuously monitor for violations of internal rules and the distribution of false information. The company indicated that it would consider further system revisions if behaviors that hinder healthy communication persist.* This article has been translated by AI. 2026-08-17 18:04:20
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Trump Orders Reduction of US-South Korea Joint Military Exercises, Sparking Security Concerns Donald Trump, the President of the United States, recently revealed that he directed a significant reduction in the US-South Korea joint military exercises known as 'Ulchi Freedom Shield' (UFS), raising alarm among opposition parties regarding a potential diplomatic and security crisis. In response, the People Power Party and the Reform Party have urged the government to formulate a countermeasure.Jang Dong-hyuk, the leader of the People Power Party, expressed his concerns on Facebook on the 17th, stating, "It seems that the US-South Korea joint exercises might be completely eliminated. I want to ask if President Lee is satisfied with this outcome."He noted that Trump attempted to cancel the joint exercises via social media but opted for a significant reduction due to the exercises being imminent. Jang criticized the current administration, saying, "The president of an allied nation cannot gain more trust than a North Korean dictator. This is a diplomatic disaster caused by the Lee administration," and questioned whether there are any plans to address this situation.The party's spokespersons labeled the incident a 'security disaster' and expressed concerns over the US-South Korea alliance and the diplomatic and security crisis. Park Seong-hoon, the chief spokesperson, commented, "The grim reality that defense exercises have been reduced to mere formalities is a result of the Lee administration's poor security perspective and irresponsible amateur diplomacy," adding, "National security cannot be maintained through wordplay or luck."He further stated, "The government must apologize to the public for shaking the foundations of the US-South Korea alliance and putting South Korea's security in jeopardy. It should immediately abandon its precarious ideological diplomacy and restore the collapsed US-South Korea cooperation to normalize effective joint defense readiness."Choi Eun-seok, the chief floor spokesperson, also remarked, "The US-South Korea joint exercises are not just a military event; they are the strongest symbol of the US-South Korea alliance and a crucial pillar for maintaining joint defense readiness," expressing concerns that the 'Korea Passing' phenomenon from the Moon Jae-in administration might resurface. He pointed out that since the Lee administration took office, there has been increasing noise surrounding the US-South Korea alliance, leading to growing public anxiety and distrust, urging an immediate halt to the self-destructive governance that is driving South Korea into crisis.Choi criticized the Blue House's response, which stated, "We hope the friendly relationship between the North Korean and US leaders will lead to meaningful dialogue," saying, "They are ignoring the public's security concerns while prioritizing expectations for the resumption of US-North Korea dialogue. Before considering North Korea's perspective, they should address the public's anxiety and stabilize the shaky US-South Korea alliance first."The Reform Party also emphasized the need to accurately interpret the signals sent by President Trump and prepare accordingly. Lee Jun-seok, the party leader, stated, "The US is increasing training with other allied nations while reducing exercises with South Korea, indicating a shift in the balance of the alliance." He added, "The true deterrent of the US-South Korea alliance is influenced by the time spent coordinating. I hope the government responds seriously to this dangerous signal."Meanwhile, President Trump stated on the 16th (local time) via social media, "It was too late to cancel the (US-South Korea joint exercises), so I directed the Secretary of Defense to significantly reduce them," adding, "Although somewhat unrelated, I recently asked the South Korean president to participate in the denuclearization of Iran, and he responded with 'No thanks.'"* This article has been translated by AI. 2026-08-17 18:04:20
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Department Stores Attract Customers with Dining and Community Strategies The competition among department stores is evolving. Rather than simply selling products, they are now attracting customers with popular dining options and desserts, while encouraging repeat visits through interest-based communities focused on sports and wine. The goal is to create reasons for customers to stay longer and connect that time to purchases in fashion and luxury goods. According to industry reports, in the first half of this year, the food and beverage (F&B) sales growth rates for Lotte, Shinsegae, and Hyundai department stores all exceeded their overall sales growth rates. Lotte Department Store's F&B sales increased by 20%, surpassing its overall sales growth of 15%. Shinsegae Department Store saw a 29.1% rise in F&B sales, significantly outpacing its overall growth of 23.6%. Notably, the number of customers in food halls rose to 24 million, an 11% increase, with new customers making up 30% of that total. Hyundai Department Store also reported a 22.8% increase in F&B sales, exceeding its overall growth of 20.7%. Department stores are transforming offline visits into unique consumer experiences by featuring dining options, desserts, and pop-up shops that cannot be easily replicated online. Lotte Department Store has introduced a premium grocery store, 'Le Picerie,' and a food hall at its Nowon location, while Shinsegae's Gangnam branch has expanded its food space to approximately 6,000 square meters. Hyundai Department Store is showcasing F&B brands through pop-ups, with successful brands transitioning to permanent locations. The trend of enhancing so-called 'community commerce' is also on the rise. In the past, department store customer management focused on identifying VIPs based on purchase amounts and offering concentrated benefits. Recently, however, the approach has broadened to build relationships based on customers' interests in areas such as work, sports, and wine. Lotte Department Store operates an 'Office Club' membership targeting office workers, offering monthly discounts and F&B vouchers. Shinsegae's South City branch has a 'Sports Crew' membership for customers purchasing in sports, fashion, and golf categories, allowing them to earn mileage based on spending. Hyundai Department Store's wine membership, 'Wajit,' goes beyond discounts to foster interactions among members through offline parties, gala dinners, and performances. If F&B serves as the entry point for attracting new customers, community engagement is the mechanism for encouraging repeat visits. The strategy aims to create a flow of 'attraction → stay → revisit → purchase' by drawing customers in with dining options and pop-ups, then connecting them to community experiences. An industry insider noted, "F&B offers a more accessible price point to experience the latest trends compared to luxury goods or fashion, significantly increasing visit frequency. Customers who enjoy meals and desserts often transition to purchasing in other categories, making it crucial to enhance the cross-purchase rate to determine the success of department store content investments."* This article has been translated by AI. 2026-08-17 18:04:10
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Korean Noodle Companies Report Mixed Results Amid Global Demand Korean noodle companies have experienced growth in sales during the first half of the year, driven by the global popularity of K-noodles, but their profitability has varied significantly. Samyang Foods led in operating profit, buoyed by the global success of its Buldak brand, while Nongshim also saw substantial profit increases thanks to strong overseas performance. In contrast, Ottogi, despite achieving double-digit growth in international sales, reported only a 2% increase in operating profit due to its domestic-focused business structure. According to the food industry on August 17, Samyang Foods reported consolidated sales of 1.4847 trillion won and operating profit of 353.3 billion won for the first half of the year, marking increases of 37.2% and 39%, respectively, compared to the same period last year. The operating profit margin stood at 23.8%. While Nongshim and Ottogi surpassed Samyang Foods in total sales, they lagged in profitability. Nongshim's sales reached 1.8901 trillion won, with an operating profit of 126.7 billion won, reflecting increases of 7.3% and 31.7%, respectively. Ottogi's sales grew by 4.2% to 1.899 trillion won, but its operating profit only rose by 2% to 104.6 billion won. Nongshim's operating profit margin was 6.7%, while Ottogi's was 5.5%, both lower than Samyang Foods. Notably, Samyang Foods' operating profit alone exceeded the combined operating profits of Nongshim and Ottogi by 122 billion won. In terms of noodle sales, Nongshim remains the leader. Its noodle sales for the first half of the year increased by 8.1% to 1.6227 trillion won. Samyang Foods' noodle and snack sales surged by 39.0% to 1.3449 trillion won, while Ottogi's noodle product sales rose by 4.4% to 548.8 billion won. While Nongshim continues to lead in overall noodle sales, Samyang Foods is rapidly closing the gap. The key driver behind Samyang Foods' strong performance was its overseas business. International sales reached 1.2308 trillion won, a 42.4% increase from the previous year, accounting for 82.9% of total sales. Domestic sales also grew by 16.5% to 253.9 billion won, but the rapid growth of international sales was the primary contributor to overall performance. The popularity of the Buldak series is spreading globally, with sales in the Americas increasing by 54% to 203.6 billion won and in China by 44% to 181 billion won in the second quarter. European sales also surged by 61% to 80.6 billion won. Second-quarter international sales exceeded 600 billion won for the first time, reaching 645.8 billion won. Nongshim also leveraged its overseas markets for growth. Its international sales, including exports and revenue from overseas subsidiaries, rose by 16% to 757.9 billion won in the first half of the year. Although this accounted for 40.2% of total sales, which is lower than Samyang Foods, stable growth from key subsidiaries in the U.S., China, and Japan, along with successful expansion into Western Europe, contributed to its performance. Notably, the improvement in international performance helped offset the sluggish domestic market. Nongshim's domestic sales fell by 0.5% to 1.2487 trillion won due to reduced consumer spending and intensified market competition, but international sales increased by over 20%, driving overall growth. Ottogi also reported double-digit growth in its international business, with overseas sales reaching 220.5 billion won, a 12.3% increase from the previous year. The popularity of K-food contributed to a 7.6% increase in sales for its U.S. subsidiary, which reached 56.6 billion won. However, despite being the largest in total sales among the three companies, Ottogi's diverse portfolio, including instant rice, curry, and sauces, results in a lower dependency on noodles and a higher domestic focus. Its international sales accounted for only 11.6% of total sales, which is significantly lower than Samyang Foods (82.9%) and Nongshim (33.9%), limiting the impact of international growth on overall performance. An industry insider noted, "As the domestic noodle market enters a mature phase, the future success of companies will depend on how quickly they can expand their local distribution networks and establish their brands overseas. The profitability of international operations is expected to be a key factor in widening the performance gap among the companies." 2026-08-17 18:04:10
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Analysis of Real Estate Policy Failures Under Moon Jae-in Government The five-year term structure of power inevitably breeds impatience. While a president's term lasts five years, by the third or fourth year, the influence of power tends to wane. If the government makes missteps that alienate public opinion or faces a scandal, this decline can accelerate. All past administrations have followed this trajectory, differing only in whether they experienced a soft landing or a rapid fall.This inherent impatience leads to an obsession with speed. The perception that there is only one to two years of effective working time at the beginning of a term drives efforts to achieve visible results in the first year, when approval ratings are relatively high. However, few administrations have successfully implemented such plans or achieved tangible outcomes. In fact, the first one to two years of past governments have generally been chaotic. The last 20 years illustrate this: the Lee Myung-bak administration struggled with the global economic crisis and the U.S. beef controversy, while the Park Geun-hye administration faced backlash over broken promises on economic democratization. The Moon Jae-in administration fared slightly better but also saw a decline in policy momentum by its second year. The Yoon Suk-yeol administration, lacking a coherent philosophy and strategy, is an exception.In this context, the Lee Jae-myung government, now 15 months into its term, has had a promising start. With the catchphrase of being a 'pragmatic government that gets things done,' it has achieved positive results across the economy. In terms of national approval ratings during the early months, the Lee administration resembles the Moon administration. Just as the Moon government garnered public support through successful inter-Korean summits, the Lee administration quickly met its five-year goal of a 'KOSPI 5000 era.' Notably, the KOSPI index even reached '9000' shortly after Lee's first year in office. While this surge is attributed to the semiconductor supercycle, it cannot diminish the significance of policy efforts such as amendments to commercial law. The rising KOSPI index naturally led to approval ratings climbing to the 60-70% range, aided by a disorganized opposition.However, as the second year begins, the atmosphere is shifting. National approval ratings began to decline in June. According to a Realmeter survey, the first 'dead cross' for President Lee's approval ratings appeared in the third week of June. By the first week of August, the gap had widened to nearly 10 percentage points (43.3% approval, 53.0% disapproval). This decline mirrors the sharp drop in approval ratings experienced by the Moon administration in the latter half of its second year in 2018. A significant factor contributing to this decline is the issue of real estate. Despite the introduction of the August 3 real estate tax measures and the August 13 supply measures, public sentiment shows little sign of changing, reminiscent of the Moon administration's struggles. Consequently, a palpable sense of 'crisis' is evident in the statements coming from the Blue House and the ruling party following the announcement of real estate policies. There are concerns that the current administration may become a 'Moon Jae-in government season two' regarding real estate issues.Of course, it is too early to judge the success or failure of the Lee administration's real estate policies. It remains to be seen how the government will modify its real estate tax reform plan and the delayed effects of supply measures on the market. However, it is undeniable that public sentiment is currently unfavorable. Just as both progressives and conservatives, as well as homeowners and non-homeowners, expressed dissatisfaction with the Moon administration's real estate policies, there is growing discontent within the ruling party and among young people regarding the current administration's real estate measures. Compounding the situation, the previously soaring stock market has also begun to cool.What results will the Lee administration's real estate policies yield? Will it follow the path of the Moon administration, which issued 28 measures, or will it take a different approach? While predictions and forecasts are challenging, there is a noteworthy reference: a book titled Real Estate and Politics by Kim Soo-hyun, who served as the policy chief in the Moon administration. Kim was a key architect of the Moon administration's real estate policies. His book serves as a memoir and a cautionary tale regarding the failures of real estate policies during that time.In the book, Kim attributes the failures of the Moon administration's real estate policies to 'global liquidity,' but he also presents points worth considering for the current administration's policymakers. He describes these as 'lessons and reflections to be learned from the frustrations of the Moon administration.' These include the pitfalls of punitive taxation aimed at controlling real estate and the limitations of slow housing supply relative to demand. Above all, he emphasizes the painful loss of 'trust in government policy.'It is likely that the key officials in the Lee administration, including Kim Yong-beom, the Blue House policy chief, Koo Yun-cheol, the economic deputy prime minister, and Lee Ok-won, the chairman of the Financial Services Commission, have all read Kim's book. They were instrumental bureaucrats involved in crafting the Moon administration's real estate policies alongside Kim. What they gleaned from the policy failures over a decade ago will determine the success or failure of the Lee administration's real estate policies.* This article has been translated by AI. 2026-08-17 18:04:00
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Korean Economy: Securing Market Access in U.S. Investments, Says Jeong Cheol "Korea must not only invest unilaterally but also secure market access commensurate with its investment expansion, creating a mutually beneficial structure for both Korea and the U.S.," said Jeong Cheol, head of the Korea Economic Research Institute and the Korea Economic Association, in a recent interview with Aju Economy. As discussions continue on the details of a $200 billion investment project in the U.S., Jeong emphasized the need for Korea to secure market access and trade benefits that correspond to its investment contributions. "The U.S. is restructuring production in strategic industries such as semiconductors, automobiles, batteries, and steel to focus on domestic capabilities while also cracking down on indirect exports through allied countries to counter China," he noted. He urged the government to maintain the agreed 15% tariff rate and continuously seek exemptions or relief from additional tariffs under Section 232 of the Trade Expansion Act. Jeong stressed the importance of presenting concrete evidence of the impact of Korean investments on the U.S. local economy. He stated, "We need to demonstrate how Korean companies' investments contribute to local employment, wages, tax revenues, and the ecosystem of partner companies. We should work to receive tariff exemptions under Section 301 of the Trade Act by bundling U.S. investments, employment, purchases of American energy, and contributions to supply chain stability together." He also highlighted the necessity of requesting item-specific tariff exemptions, low tariff quotas, reasonable application of origin standards, and temporary tariff suspensions during the local investment implementation period. Regarding the U.S.-China strategic competition, Jeong suggested that Korea should adopt different response strategies for various industries and products. He remarked, "Korea's choice is not simply between 'the U.S. or China,' but rather 'what to collaborate on and with whom.' In advanced technology and strategic industries, we should strengthen supply chain cooperation with the U.S. and friendly nations, while pragmatically utilizing the Chinese market in non-security areas." He identified the European Union's Carbon Border Adjustment Mechanism (CBAM) as a new condition affecting companies' market entry. In the short term, he recommended expanding support for small and medium-sized exporters to measure and verify carbon emissions through a joint data platform, specialized personnel, verification costs, and consulting. In the long term, Jeong called for a transition to electric and hydrogen-reduced steelmaking, increased low-carbon power, and improved energy efficiency. He emphasized, "Carbon reduction is no longer just an environmental policy; it is a trade policy and a matter of industrial competitiveness." Jeong pointed out that the spread of protectionism externally and the narrow recovery focused on semiconductors internally pose risks to the Korean economy. He noted, "While the recovery has begun due to the U.S.'s increased investment in artificial intelligence (AI) and our semiconductor technology, the benefits have not sufficiently spread to other industries. Excluding Samsung Electronics and SK Hynix, the operating profits of listed companies have actually decreased by 3.7%, highlighting a clear 'K-shaped polarization.'" He stressed the need to expand the recovery led by semiconductors to the broader manufacturing sector, domestic consumption, and new industries. Jeong warned, "The narrower the recovery base, the weaker the sustainability of growth and the overall economy's resilience to external shocks." For the next decade, Jeong proposed 'Physical AI' as a growth driver for the Korean economy. He described Physical AI as integrating AI into manufacturing sites to enhance productivity in sectors such as automotive, shipbuilding, steel, and batteries, while also developing robots, sensors, AI semiconductors, and control software as new export industries. He emphasized the importance of spreading the productivity benefits of AI across all industries. He stated, "Rather than focusing on specific industries, creating conditions for all industries to transition is the path to becoming a country that not only excels at making AI but also at using it effectively." To foster new growth drivers, including Physical AI, Jeong argued that regulations and licensing systems hindering corporate investment must be improved. He suggested, "We should transition to a negative regulatory framework that allows new attempts that are not explicitly prohibited while maintaining clear safety standards, and expedite the licensing processes for AI data centers and advanced semiconductor factories." Jeong holds a master's degree in economics from Sogang University and a Ph.D. in economics from the University of Michigan. He has served as a professor at the Georgia Institute of Technology, chief economist at the Korea International Trade Association, and vice president of the Korea Institute for International Economic Policy (KIEP). Since 2024, he has been the head of the Korea Economic Association and the Korea Economic Research Institute. * This article has been translated by AI. 2026-08-17 18:04:00