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  • AI Revolutionizes K-Bio: Companies Build In-House Platforms Amid Talent Shortage
    AI Revolutionizes K-Bio: Companies Build In-House Platforms Amid Talent Shortage Domestic pharmaceutical and biotechnology companies are increasingly developing their own artificial intelligence (AI) platforms and engaging in global collaborative research. This strategy aims to enhance their competitiveness in new drug development by combining proprietary data and research capabilities with AI-driven candidate substance discovery. However, the industry is still in its early stages, as few companies have secured sufficient specialized personnel and high-quality research data for AI-driven drug development.According to industry sources, Hanmi Pharmaceutical has designed an obesity drug candidate, HM17321, using its proprietary AI platform, HARP-pSAR. HM17321 aims to reduce weight while maintaining or increasing muscle mass and is currently undergoing Phase 1 clinical trials in the United States.The company reports that AI can predict pharmacological effects based on subtle changes in protein structures and suggest optimal design directions, enabling ultra-fast screening with minimal experimental data. Recently, Hanmi signed an exclusive licensing agreement with Genentech, a subsidiary of Roche Group, for HM17321, with a deal value of up to $2.3 billion (approximately 3.2 trillion won).The trend of pharmaceutical companies building their own platforms is on the rise. JW Pharmaceutical operates an AI drug development platform called J-Wave, which integrates its existing drug discovery systems, Jewel and Clover. The platform aims to reduce drug development time and costs by over 25-50% by analyzing more than 400 genomic datasets and over 45,000 compound data.The company plans to utilize its proprietary cell lines, organoids, disease animal models, and synthetic compound data for AI training to discover and optimize new drug candidates.Daewoong Pharmaceutical has created a database of molecular information for 800 million compounds, which serves as the foundation for its AI drug development system, Daisy. Meanwhile, Dong-A Socio Group established its own AI drug development platform, AIDDP, in July in collaboration with its IT subsidiary DAI and Dong-A ST. AIDDP is designed to perform tasks such as new compound design, predicting binding affinity between candidate substances and target proteins, molecular simulations, and managing research results within a single environment.Additionally, SK Biopharm entered into a joint research and development agreement with Insilico Medicine in June for drug candidates in the central nervous system (CNS) and neuroimmunology fields. The two companies plan to conduct joint research targeting three CNS-related targets using Insilico's AI platform, with a total contract value of up to $2.5725 billion (approximately 3.58 trillion won) depending on research, development, regulatory, and commercialization outcomes.The competition among AI drug development companies is also intensifying. Pharos AI Bio is using its Chemiverse platform to discover new drug candidates, while OncoCross focuses on drug repurposing based on its RaptorAI platform to find new indications for existing drugs. Syntekabio is advancing large-scale virtual screening technology, and Galax is leveraging protein and antibody design technology to stay competitive.However, some industry experts point out that while announcements of AI platform development and implementation are increasing, there is a lack of institutional support to back these initiatives. The shortage of specialized personnel is also a significant concern. A survey conducted by the Korea Pharmaceutical and Bio Association's AI Drug Research Institute among 55 respondents from domestic pharmaceutical and biotech companies, AI firms, academia, and research institutions found that 89.1% are either utilizing or considering the use of AI in drug development. However, 67.3% reported having no AI specialists in their drug development departments. While many companies are interested in adopting AI, there is a shortage of personnel to apply it in actual research.Industry insiders emphasize that AI platforms should not be approached merely as software implementations. An AI drug development expert stated, "High-quality experimental and clinical data organized by disease, researchers capable of validating these results, and organizations that can connect AI outcomes to actual candidate substances are all necessary simultaneously." They added, "In the future, the amount of data accumulated and the success of clinical transitions will determine competitiveness among companies more than just having a platform."Amid this backdrop, a domestically developed bio AI model called K-Fold has emerged, which predicts not only the three-dimensional structure of proteins but also how drug candidates will bind to proteins. The Korea Pharmaceutical and Bio Association plans to promote the industrial application of K-Fold through its AI Drug Research Institute.Noh Yeon-hong, president of the Korea Pharmaceutical and Bio Association, remarked, "The development of K-Fold signifies our capability to secure world-class core technology beyond merely utilizing foreign bio AI technologies. It is expected to lower the entry barriers for researchers to utilize AI and enhance the speed and efficiency of new drug candidate discovery."* This article has been translated by AI. 2026-09-20 18:08:10
  • AI Revolutionizes Drug Development, Shaping Pharmaceutical Competitiveness
    AI Revolutionizes Drug Development, Shaping Pharmaceutical Competitiveness Artificial intelligence (AI) is moving beyond being a mere tool for identifying drug candidates and is now deeply integrated into the entire drug development process. Its applications are rapidly expanding, covering everything from disease target discovery to protein structure prediction, candidate design and optimization, toxicity prediction, clinical trial participant selection, and forecasting clinical success. In response, major global pharmaceutical companies are ramping up their investments in AI.According to reports from Reuters and other outlets on September 20, the scope of AI collaborations among leading pharmaceutical companies is broadening beyond individual candidate discovery to encompass research and development, manufacturing, and commercialization.Eli Lilly announced in January that it would invest up to $1 billion over five years in a drug development lab that combines AI and robotics in partnership with NVIDIA. The plan involves using NVIDIA's latest AI chips to design drug candidates while simultaneously generating the research data needed for AI model training.In June, Novartis entered into a collaboration with U.S. biotech company Orionis Biosciences to develop molecular glue drugs. The agreement includes an upfront payment of $40 million, with potential milestones bringing the total to $1.4 billion. The goal is to leverage Orionis's AI-based discovery platform to target previously difficult-to-address drug targets using molecular glue technology. This marks the second collaboration between the two companies, following their initial agreement in 2020.A notable example of AI's involvement in the entire drug development process is the candidate drug 'Rentosertib' for idiopathic pulmonary fibrosis (IPF), developed by Hong Kong-based Insilico Medicine. The drug was selected as a clinical candidate within 18 months after AI identified a new target, TNIK, and designed the drug molecule using the generative AI platform 'Chemistry 42.' It is currently in Phase 3 clinical trials in China.On September 7, the journal Nature Biotechnology published research indicating that patients treated with Rentosertib showed biological age reversal across six independently developed proteomic aging clock indicators. This marks the first instance of a drug candidate identified by AI demonstrating potential for age reversal in clinical settings, drawing significant attention from the industry.As the use of AI in the biotech sector rapidly expands, the market is expected to experience significant growth. According to global market research firm Mordor Intelligence, the AI market in the pharmaceutical and biotech sectors is projected to grow from $6.16 billion this year to $34.99 billion by 2031, representing an annual growth rate of approximately 41%.Kim Min-seok, a senior researcher at the Korea Health Industry Development Institute, stated, "AI technology has emerged as a key means to drive innovation throughout the entire drug development cycle. It is increasingly being utilized in areas such as optimizing clinical trial design, developing patient-specific therapies, and repurposing drugs, serving as a central axis for transforming existing paradigms across corporate operations."The market outlook suggests that competition among pharmaceutical companies will hinge on the quality of research and clinical data they can secure and how quickly they can validate AI-generated predictions through experimentation. The ability to effectively connect automated research facilities with clinical development organizations is also seen as a critical competitive advantage. Companies that can translate AI-derived research results into actual drug development and commercialization are expected to lead in the competitive landscape.* This article has been translated by AI. 2026-09-20 18:08:00
  • Impact of Upcoming US-China Summit on South Korean Economy
    Impact of Upcoming US-China Summit on South Korean Economy The South Korean stock market is focused on the upcoming US-China summit scheduled for September 24, as it struggles to surpass the 7000-point mark.This summit is expected to address a wide range of issues, including President Donald Trump's exit strategy from the Iran conflict, trade policies with China, AI regulation, and export policies for critical minerals such as rare earth elements. The outcomes could serve as significant indicators for future international relations.Notably, Samsung Electronics and SK Hynix, which are crucial to the South Korean stock market, are deeply involved in the US-China supply chains for advanced semiconductors and AI. Analysts suggest that the summit's results could significantly alter the export environment, impacting not just individual stock prices but the overall supply and demand in the domestic market.According to industry sources on September 20, Chinese President Xi Jinping will skip the UN General Assembly in New York and instead travel to Washington, where he will meet with President Trump at the White House on September 24. This will be Xi's first visit to the White House in 11 years, and Trump is expected to personally greet him at the airport.During the summit, the two leaders will discuss various economic issues, including AI systems, export regulations for rare earth elements, and tariffs. The South Korean market is particularly attentive to discussions surrounding open-weight and closed-weight models in AI. Open-weight models allow for the public disclosure of AI model weights for customization, while closed-weight models restrict access to AI services provided by the company without disclosing weights.Chinese AI companies, such as DeepMind, have been developing AI using open-weight models to catch up with the US. However, the US views this as a form of technology theft and is advocating for stricter regulations. Earlier, US Treasury Secretary Scott Vessen announced that discussions on open-weight and closed-weight models would be a key agenda item in high-level negotiations before the summit, stating, "This will help avoid common risks faced by both countries and prevent the separation of our AI systems."US regulations on semiconductor exports to China are directly linked to the exports of Samsung Electronics and SK Hynix, which support the South Korean stock market. If discussions on open and closed-weight models lead to stricter US regulations on China, it could create a favorable environment for South Korean semiconductor investments. A securities industry official noted, "Following last week's US interest rate hike, this week's sentiment will significantly shift based on the semiconductor regulatory direction from the US-China summit. If China's low-cost AI development pathways are restricted, it will create a favorable environment for South Korean semiconductor exports, improving KOSPI supply and demand."* This article has been translated by AI. 2026-09-20 18:04:20
  • U.S.-China Summit and Chuseok Holiday Heighten Tensions in South Korean Stock Market
    U.S.-China Summit and Chuseok Holiday Heighten Tensions in South Korean Stock Market The South Korean stock market is experiencing significant volatility due to a combination of rising bond yields from U.S. interest rate hikes, increasing international oil prices, and a strengthening won. Over the past week, the domestic market showed signs of hesitation amid discussions on the pace of artificial intelligence (AI) development and the hawkish stance of the U.S. Federal Open Market Committee (FOMC). This week, the market is expected to face further fluctuations due to the upcoming U.S.-China summit and the Chuseok holiday.According to the Korea Exchange, the KOSPI closed at 6,894.23 on September 18, down 15.68 points (0.23%) from the previous week’s close of 6,909.91. The domestic market initially plummeted by over 3%, dipping into the 6,600 range, before narrowing its losses by the end of the week. In the securities market, foreign and individual investors sold a net 8.871 trillion won and 292.8 billion won, respectively, while institutions bought a net 1.053 trillion won, providing some support.Several factors are contributing to the market's volatility. The military conflict between the U.S. and Iran, along with escalating tensions between Saudi Arabia and Yemen's Houthi rebels, has kept international oil prices above $100. Additionally, the yield on the U.S. 10-year Treasury bond has surpassed 5% for the first time in 19 years.As the market awaited the FOMC meeting, it maintained a cautious stance, which intensified after the Fed raised the benchmark interest rate by 25 basis points to a range of 3.75% to 4.00% during its meeting on September 15-16. Following the meeting, Fed Chair Kevin Warsh made several hawkish comments.The call for a slowdown in AI development by leaders of global AI companies, including Anthropic, OpenAI, SpaceX, and Google DeepMind, has also exerted downward pressure on the South Korean stock market, which has a significant semiconductor sector. However, as the AI competition escalates into a geopolitical struggle, the initial concerns over the slowdown have quickly subsided, leading to a rebound in the domestic market in the latter part of the week.Market analysts are focusing on the U.S.-China summit scheduled for September 24. A key agenda item will be negotiations on AI, and if the U.S. tightens its regulations on AI and semiconductors concerning China, it could significantly impact the supply and demand dynamics of major domestic stocks. As of September 18, the market capitalizations of Samsung Electronics (1,680 trillion won) and SK Hynix (1,350 trillion won) accounted for 43.9% of the total KOSPI market capitalization.The Chuseok holiday also presents a variable. With a long holiday anticipated, there is a possibility of a conservative shift in overall market supply and demand. Historically, the market has shown weak performance before holidays due to supply gaps, but tends to rebound afterward as waiting demand flows in.Lee Kyung-min, a researcher at Daishin Securities, noted, "Over the past decade, the average KOSPI return during the five trading days before and after Chuseok has been -0.42% and 0.68%, respectively. Given the hawkish FOMC's impact and the supply gap before the holiday, a short-term market downturn could present a valid buying opportunity for a rebound after the holiday."Analysts still consider the KOSPI to be in a severely undervalued state. The 12-month forward price-to-earnings ratio (PER) for the KOSPI remains around 5, a historical low, suggesting that short-term volatility should be viewed as an opportunity to increase holdings.Key sectors include semiconductors, power equipment, and automobiles. Daishin Securities highlights IT hardware, retail, automobiles, and power equipment as sectors to watch, while NH Investment & Securities recommends semiconductor stocks, energy storage systems (ESS), AI platform services, securities, and biotechnology.Na Jeong-hwan, a researcher at NH Investment & Securities, stated, "The consensus for KOSPI net profit this year is 806.3 trillion won, with an upward adjustment to 1,047.5 trillion won for next year, although the pace of increase has slowed. The KOSPI's 12-month forward PER is at a record low of 5.5, indicating that doubts about earnings are suppressing stock prices. While there are concerns about earnings being lowered due to the falling won-dollar exchange rate, the exchange rate is rebounding in the 1,330 won range, and as normalization occurs, these concerns will ease. As the performance of AI companies like Micron becomes clearer, doubts will gradually dissipate, and if oil prices decline stabilizing U.S. long-term Treasury yields, stock price recovery will accelerate further."* This article has been translated by AI. 2026-09-20 18:04:20
  • Government Subsidy Programs Show High Achievement Rates but Questionable Impact
    Government Subsidy Programs Show High Achievement Rates but Questionable Impact Despite achieving 100% of the performance targets set by the government, many government subsidy programs are failing to demonstrate actual policy effectiveness. Critics argue that when targets are set too low or when indicators focus on simple satisfaction and participation rates, it becomes difficult to assess the real outcomes of these programs.According to the government's evaluation results released on September 20, among the 1,014 projects evaluated across 42 ministries this year, 588 projects, or 57.99%, received a 'project improvement' designation. The total budget for the evaluated projects was 42.7661 trillion won, with 28.3076 trillion won, or 66.19%, allocated to projects that received the improvement designation.The issue lies in the fact that many projects received improvement designations despite meeting their targets. This raises concerns about the adequacy of the target levels and performance indicators.A notable example is the Ministry of Culture, Sports and Tourism's tourism industry loan support program. The performance indicator for this program, the 'increase in sales of loan-receiving companies,' showed a 23.0% increase in 2025, significantly exceeding the initial target of 5.92%. While this may appear to be a successful project at first glance, the evaluation panel noted that the indicator requires further validation to accurately reflect the actual growth of the beneficiary companies. It is challenging to determine whether the sales increase is due to the loan support or other factors such as market improvements.The evaluation panel emphasized the need to compare the sales growth rates of supported companies with similar non-supported companies and to use survival rates and employment retention rates as supplementary indicators to more precisely measure the pure effects of government support.In some cases, projects achieved all three performance indicators, but the targets were set lower than the previous year's performance or the average of the last three years. While achieving the targets may seem like a success, if the targets were set lower than past performances, a 100% achievement rate does not necessarily indicate project improvement or policy effectiveness.The Ministry of Oceans and Fisheries' overseas market development support program for shipping and logistics companies has been advised to improve its performance target levels. The targets for exceeding the overseas logistics market development support program were set at 12 cases for 2023, 10 for 2024, and 8 for 2025, indicating a need for more challenging goals.There are also instances where budgets have increased while performance targets have been lowered or set post-factum. The Ministry of Climate, Energy, and Environment's river estuary waste cleanup project saw its budget for 2026 increase by 13.342 billion won compared to the previous year, yet the performance target for waste collection was set lower than the previous year or determined after the fact, highlighting a lack of consistency between budget size and performance targets.The Ministry of SMEs and Startups' Sejong regional startup infrastructure support program received a 'reduction' designation. The performance indicator targets were deemed too low compared to the last three years. The primary performance indicator for this program, the survival rate of graduated startup incubation centers, was set at 86.8%, despite last year's performance being 91.7%. The target for the regional settlement rate of non-capital area graduated companies was set at 57.1%, also lower than the previous year's rate of 61.5%.Indicators that are easy to measure, such as beneficiary satisfaction or the number of participants, also have limitations. The Intellectual Property Office's intellectual property creation support program was criticized for having performance indicators focused on satisfaction, making it difficult to demonstrate the qualitative outcomes of the program and lacking objective justification or rationale.Ultimately, there is a call to shift the performance management of government subsidy programs from merely achieving targets to focusing on actual policy effects. This involves comparing the differences between supported and non-supported entities and expanding the use of tangible outcome indicators such as sales growth rates, survival rates, and employment retention rates. Furthermore, there is a growing demand for the results of performance evaluations to be effectively reflected in the budget formulation for the following year, necessitating a strengthened budget adjustment system based on performance.* This article has been translated by AI. 2026-09-20 18:04:10
  • Investment in New Technologies Grows Among Securities Firms
    Investment in New Technologies Grows Among Securities Firms The securities industry is experiencing a surge in investment in new technologies. Firms like Samsung Securities and Hyundai Motor Securities are either participating as investors in funds managed by their affiliates or directly managing funds to secure returns from new technology investments.On September 20, the Financial Supervisory Service's electronic disclosure system (DART) reported that Samsung Securities announced it would invest 30 billion won in the 'SVIC No. 81 Productive Finance New Technology Investment Fund' on September 18. This fund is expected to be managed by Samsung Venture Investment, with a formation meeting scheduled for the fourth quarter of this year.Samsung Securities plans to participate in a capital call method, flexibly executing its investment based on the fund's requests for capital contributions. The specific timing for the payment of the 30 billion won commitment has not yet been determined. Funds will be contributed as the fund identifies investment targets and requests capital.On the same day, Hyundai Motor Securities disclosed its investment in the 'Noblesse Hyundai Motor Securities Semiconductor AI New Technology Investment Fund,' which has a total commitment of 129 billion won. Hyundai Motor Securities will contribute 10 billion won, matching a similar investment from Hyundai Capital. Together, their contributions account for 15.5% of the total fund.Hyundai Motor Securities, as the fund manager, will co-manage the fund with Noblesse Partners, participating in both the selection of investment targets and fund management. The stated purpose of the investment is to diversify business in new technology finance and corporate finance. Hyundai Capital's capital contribution is scheduled for October, and the fund will have a lifespan of five years from its initial establishment.Additionally, Hyundai Motor Securities invested 10 billion won in the 'Zero One No. 3 Fund,' which was established in May of last year with a total size of 125 billion won. Hyundai Motor and Kia each contributed 40 billion won, and Hyundai Motor Securities will co-manage the fund with the two companies. This fund aims to discover future new business technologies of the Hyundai Motor Group, focusing on AI, robotics, and hydrogen, and to invest in promising startups.Recently, securities firms have been actively pursuing the establishment and investment in new technology funds. Shinhan Investment Corp. announced in June the launch of the 'Shinhan-DB Productive Finance New Technology Investment Fund,' co-managed with DB Asset Management, with a total size of 50 billion won, with both Shinhan Financial Group and DB Group contributing 25 billion won each.NH Investment & Securities also announced last year that it would deploy 315 billion won in venture capital related to innovative industries and small and medium-sized enterprises. This investment will be split into two tracks: 100 billion won for innovative industries such as AI, semiconductors, and deep tech, and 215 billion won for small and medium-sized enterprises, aligning with the government's push for 'productive finance.'Moreover, the Korea Financial Investment Association and CEOs of domestic securities firms have been exploring investment opportunities in AI, digital finance, and the space industry in Europe this month, continuing their activities in new technology investments. They have reviewed the status of key technologies such as on-device AI and humanoid and physical AI, as well as changes in the value chain and business models of related industries for new investment themes.However, large-scale investments by securities firms carry risks of losses. When a securities firm invests capital in a fund, it may directly bear losses depending on the investment performance. Given that investment execution and recovery take time, future evaluations of investment assets and recovery performance are expected to influence overall results.* This article has been translated by AI. 2026-09-20 18:04:10
  • Trump and Kim Jong Un May Meet Again as US-China Summit Approaches
    Trump and Kim Jong Un May Meet Again as US-China Summit Approaches Could a fourth summit between U.S. President Donald Trump and North Korean leader Kim Jong Un take place? The upcoming U.S.-China summit in Washington on September 24 may determine that direction. Notably, China is taking a more active role in facilitating dialogue between the U.S. and North Korea compared to the past.The South China Morning Post reported on September 10 that China is exploring ways to play a 'proactive and constructive role' in reviving diplomacy between the U.S. and North Korea. It was also noted that China would support any credible efforts to resume talks, although specific measures have not been disclosed.On September 15, French intelligence and diplomacy outlet Intelligence Online reported that the Chinese Communist Party is preparing multiple scenarios for hosting a summit between Trump and Kim in four different cities, including locations within North Korea. The report suggests that China aims to position itself as the de facto mediator connecting Washington and Pyongyang ahead of Xi Jinping's visit to the U.S.Xi Jinping: The Sole Mediator for US-North Korea TalksFor China, the resumption of U.S.-North Korea dialogue is not a bad option. If the U.S. and North Korea begin talks, military tensions on the Korean Peninsula could decrease, aligning with China's emphasis on peace and stability in the region. Additionally, China seeks to prevent a scenario where the U.S. and North Korea negotiate independently, thereby expanding its influence over the Korean Peninsula issue. This is particularly significant given the strengthening ties between North Korea and Russia, as China's role as a mediator could reaffirm its influence over North Korea.Xi Jinping is uniquely positioned to promote a U.S.-North Korea summit. He visited Pyongyang for a meeting with Kim on June 8-9, where he emphasized the need for strategic coordination and cooperation while safeguarding each country's sovereignty, security, and development interests. The focus of the June summit was more on strengthening the strategic relationship between China and North Korea rather than on denuclearization.As a result, it is conceivable that during the September 24 U.S.-China summit, Xi could convey Kim's demands to President Trump. Xi might confirm North Korea's willingness to engage in dialogue and relay that to Trump. Conversely, he could also communicate to Kim the measures the U.S. is willing to offer and the desired outcomes of negotiations. Beyond merely relaying positions, China could play a role in lowering the demands of both sides.China Prefers Shenzhen as the VenueThe location of the talks could also be a significant factor showcasing China's role. One of the proposed venues is Shenzhen, where the Asia-Pacific Economic Cooperation (APEC) summit will be held in November. While Trump's attendance at APEC has not been officially confirmed, the Kremlin indicated on September 1 that discussions are underway regarding a potential trilateral meeting involving Trump, Xi, and Russian President Vladimir Putin.If the U.S.-North Korea summit were to take place in Shenzhen, it would represent an ideal scenario for China, as it would facilitate the meeting while showcasing China's diplomatic presence in the Korean Peninsula issue. However, from Trump's perspective, a summit in Shenzhen may not yield the expected political benefits, leading to speculation about alternative locations.Former U.S. Special Representative for North Korea Stephen Biegun suggested that Trump might consider meeting Kim after the APEC summit in Shenzhen, stating, 'It would not be surprising if Trump proposed such a meeting in Pyongyang.'Even if specific dates for a U.S.-North Korea summit are not announced during the September 24 U.S.-China summit, an exchange of views on North Korea could serve as a starting point for subsequent negotiations. If the North Korea issue is highlighted as a separate agenda during the U.S.-China summit, the diplomatic stage surrounding the U.S.-North Korea summit could expand beyond Washington and Pyongyang to include Beijing.* This article has been translated by AI. 2026-09-20 18:04:10
  • Samsung Electro-Mechanics Nears 2.5 Trillion Won in AI MLCC Contracts
    Samsung Electro-Mechanics Nears 2.5 Trillion Won in AI MLCC Contracts Samsung Electro-Mechanics is on the verge of surpassing 4 trillion won in long-term supply contracts for multilayer ceramic capacitors (MLCCs) related to artificial intelligence (AI). Analysts suggest that the benefits of AI infrastructure, previously concentrated in graphics processing units (GPUs) and high-bandwidth memory (HBM), are now extending to passive components that control power and signals.According to industry sources, Samsung Electro-Mechanics is in discussions with global power and electronic component companies for a long-term supply contract (LTA) worth around 700 billion won for MLCCs used in AI servers. If successful, this contract would push the total value of long-term agreements secured since May for silicon capacitors and AI server MLCCs beyond 4 trillion won.Earlier this month, Samsung Electro-Mechanics signed a supply contract for AI server MLCCs worth 1.072 trillion won with a major global corporation, marking the largest contract in the company's history for MLCCs. The company is reportedly engaged in long-term contracts with over ten global tech giants and semiconductor firms, with additional agreements under negotiation.MLCCs play a crucial role in stabilizing current in electronic circuits and reducing signal interference between components. Although they are smaller than a grain of rice, high-performance AI servers require a significantly higher number of MLCCs to ensure stable power supply. AI server products reportedly contain more than ten times the MLCCs compared to standard servers, with prices exceeding three times that of mobile applications. The industry notes that only a handful of manufacturers can produce MLCCs capable of withstanding high temperatures and voltages 24/7.The competitive performance of AI chips is also driving demand. According to market research firm TrendForce, the number of specific high-capacity MLCCs used in next-generation AI server boards is expected to surge by 632%, from 1,440 to 10,544 units. Some MLCCs used in NVIDIA's next-generation 'Vera Rubin' platform have increased from 320 to 500 units per board. The expansion of proprietary AI chips by major tech companies like Google and AWS is also supporting this demand.Samsung Electro-Mechanics is shifting its production capacity towards AI. In July, the company announced plans to invest approximately 15 trillion won by 2040 to develop its Busan facility into a key production and R&D hub for high-value MLCCs and high-performance package substrates for AI data centers. The industry estimates that Samsung Electro-Mechanics holds over 40% market share in the AI server MLCC sector.Go Ui-young, a researcher at iM Securities, stated that as Samsung Electro-Mechanics secures large long-term contracts, it is strengthening its supply leadership in the high-value MLCC market for servers and AI. The expansion of AI investments is driving up demand and prices for key components within servers, leading to a rapid restructuring of Samsung Electro-Mechanics' business focus from smartphones to AI and data centers.* This article has been translated by AI. 2026-09-20 18:04:10
  • Government Audit Reveals Only 6.9% of Subsidy Projects Are on Track
    Government Audit Reveals Only 6.9% of Subsidy Projects Are on Track The government has conducted a comprehensive evaluation of its 42.8 trillion won ($32 billion) subsidy projects, revealing that only 6.9% of the assessed projects received a rating of being on track. Out of 1,014 projects evaluated, 980 were found to require improvements, budget cuts, consolidations, or cancellations.Instances were identified where funds were allocated but not utilized effectively, or where projects only met low performance targets. Some projects requested budget increases despite failing to address issues highlighted in previous evaluations, prompting calls for stronger connections between evaluations and budget planning.According to the '2026 National Subsidy Project Extension Evaluation Report' submitted to the National Assembly by the Ministry of Strategy and Finance's evaluation team on September 20, only 34 projects, or 3.35% of the total, were deemed to be on track this year.The majority of projects, 588 (57.99%), were classified as needing improvements, followed by 372 (36.69%) requiring budget cuts, 18 (1.78%) slated for consolidation, and 2 (0.20%) recommended for cancellation. This indicates that more than 90% of the projects evaluated need adjustments in their operational methods or funding levels.This year, the government expanded the evaluation scope to include all subsidy projects as the three-year expiration period for many projects approached, rather than the previous practice of evaluating about one-third of the total. The evaluation assessed the necessity of projects, the appropriateness of plans, execution efficiency, and outcomes, although projects with inappropriate duration settings were excluded from the evaluation.In terms of budget, the proportion of projects rated as on track was 6.85%, amounting to 2.93 trillion won ($2.2 billion) out of a total evaluated budget of 42.77 trillion won ($32.1 billion). Projects requiring improvements accounted for 28.31 trillion won ($21.1 billion), or 66.19%, while those requiring budget cuts totaled 11.06 trillion won ($8.3 billion), or 25.74%. The budgets for consolidation and cancellation were recorded at 514.4 billion won ($386 million) and 7.3 billion won ($5.5 million), respectively.Budget cuts affected projects across 32 ministries, with the highest number of projects in the Ministry of Climate, Energy, and Environment (55), followed by the Ministry of Health and Welfare (46) and the Ministry of Culture, Sports, and Tourism (42). The largest budget for projects requiring cuts was in the Ministry of Health and Welfare, totaling 2.3 trillion won ($1.7 billion), followed by the Ministry of Climate, Energy, and Environment at 1.43 trillion won ($1.1 billion) and the Ministry of Agriculture, Food, and Rural Affairs at 1.32 trillion won ($1 billion).However, the 11.06 trillion won ($8.3 billion) designated for budget cuts represents the total budget for those projects and does not indicate the actual amount to be cut. The classification of projects needing improvements acknowledges the necessity for financial support while recommending enhancements in execution methods and performance indicators. It is essential to examine recurring management failures on a project-by-project basis rather than interpreting all non-compliant budgets as wasteful.A significant issue identified was the discrepancy between fund allocation and actual execution. When central ministries distribute subsidies to local governments or implementing agencies, the funds are recorded as executed, but delays in administrative procedures often prevent the money from being spent in the field.For instance, while the subsidy project related to national geoparks had a disbursement execution rate of 99.9%, the weighted average actual execution rate over the past three years was only 85.3%. The West Coast Discovery Center faced delays in land acquisition and construction planning, resulting in an actual execution amount of zero for its 500 million won ($380,000) budget for 2024. The evaluation team recommended developing measures to manage the gap between disbursement and actual execution.There were also cases where high achievement rates did not translate into clear policy effects. The rural waste treatment facility project met its target of reducing landfill rates for rural household waste by 100%, but it was criticized for lacking scientific basis and proactivity in its goal setting.In the tourism industry loan support program, while the revenue growth rate for beneficiary companies significantly exceeded targets, there was a call for verification of the pure effects of government support. To distinguish the impact of support, comparisons should be made with similar companies that did not receive assistance regarding revenue growth rates, survival rates, and employment retention rates.There were also instances where budget requests did not reflect the same criticisms raised in evaluations, indicating limitations in post-management. The evaluation team pointed out that simply expanding the participating sectors in the greenhouse gas reduction program was insufficient to justify the increase in budget size, and the rationale for changing the budget calculation method was not adequately presented. Despite these concerns, the responsible ministry requested a 94% increase in this year's budget.* This article has been translated by AI. 2026-09-20 18:04:00
  • Government Subsidy Discrepancies: High Allocation Rates, Low Actual Spending
    Government Subsidy Discrepancies: High Allocation Rates, Low Actual Spending Despite the central government providing most of the subsidies for projects like the National Geopark initiative, instances of funds not being utilized at the project level are recurring. This is particularly evident in infrastructure projects requiring preliminary procedures such as land acquisition, design, and permits, where delays in project execution after budget allocation lead to significant carryover and waste.According to the "2026 National Subsidy Project Extension Evaluation Report" submitted to the National Assembly by the Ministry of Strategy and Finance's Subsidy Project Evaluation Team on September 20, the initial allocation execution rate for the National Geopark project reached 99.9%. However, the actual spending rate fell short of this figure. Over the past three years, the weighted average actual execution rate based on allocated funds was recorded at 85.3%. The annual actual execution rates varied significantly, with 92.2% in 2023, 73.6% in 2024, and 93.2% in 2025.Notably, delays in execution were pronounced in the capital subsidy project for the West Coast World Geopark Discovery Center. The total project cost is 5.415 billion won, with 500 million won allocated in 2024. However, due to delays in administrative procedures such as land acquisition and architectural planning, the actual expenditure was recorded at zero.Nevertheless, 2.086 billion won has been allocated for the project in 2026. Following the settlement of the 2024 subsidy project, a remaining balance of 244 million won was noted, which corresponds to 26.5% of the allocated amount at that time.The evaluation materials pointed out the significant gap between the initial allocation execution rate and the actual execution rate for the National Geopark project, highlighting the occurrence of large-scale carryover and waste. It emphasized the need for separate management of allocations and actual expenditures, suggesting a management system to verify whether project funds are being spent in accordance with the actual progress of the work.Similar issues have been observed in local river maintenance projects, where the actual execution rates have remained between 74% and 82% over the past three years. The evaluation process also noted that some local governments, which failed to adequately utilize carryover funds from the previous year, continue to receive additional national funding.The budget for local river maintenance projects in 2026 is set at 296.9 billion won, reflecting a 13.3% increase from the previous year. The evaluation materials indicated that while the maintenance and repair of rivers are crucial for national safety functions, there is a need to revise the existing allocation system and distribution criteria given the low actual execution rates.Infrastructure projects inherently cannot be executed immediately upon budget allocation due to their nature. Actual expenditure on construction costs can only occur after completing preliminary procedures such as design, permits, land compensation, and community consultations. Delays in these processes can lead to postponed expenditures at the local government or project execution level, even after the central government has allocated subsidies.Evaluations have confirmed that similar delays in administrative procedures during the planning stages of other facility projects have resulted in low actual execution rates. Consequently, some projects are subject to budget reductions in subsequent years if their actual execution rates fall below a certain threshold or if carryover occurs repeatedly.The issue lies in the discrepancy between the central government's fiscal execution rate and the actual execution rate at the final project level. When the government allocates budgets to local governments, the central execution rate appears high, but if the actual project funds are not utilized on-site, the financial impact on the intended beneficiaries may be delayed. The economic stimulus effect of rapid fiscal execution may also be limited if actual expenditures do not follow.This highlights the need to supplement the budget allocation criteria for government subsidy projects, moving beyond a simple focus on allocation rates to include actual feasibility and execution rates. In particular, for local governments or agencies with significant carryover from the previous year, the necessity and feasibility of new projects should be carefully evaluated.* This article has been translated by AI. 2026-09-20 18:04:00