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Bidding Quiet in Mokdong as Brand Lounges Increase Amid Reconstruction Competition The competitive bidding landscape among construction companies in Seoul's redevelopment market has become increasingly subdued. However, the competition for contracts has not disappeared entirely. As construction and financing costs rise, companies are shifting their strategies from direct confrontations at bidding sites to identifying high-potential projects and securing member support months in advance.In recent bids, single bids have become common, while major construction firms are establishing brand lounges around the project sites, leading to a heated 'off-site bidding war.' Mokdong New Town, valued at approximately 30 trillion won, is a prime example.According to the construction industry on September 10, the cumulative contract amount for urban redevelopment projects by the top 10 construction firms, based on their construction capacity evaluations as of the fourth week of August, is about 30.87 trillion won. However, among the 25 projects in Seoul where these firms secured construction rights this year, only three—Apgujeong District 5, Shinbanpo Districts 19 and 25, and Seongsu Strategic Maintenance District 4—saw multiple companies compete in actual bidding. This represents just 12% of the total, while the remaining 22 projects proceeded without competition.High-potential projects are no exception. DL E&C secured construction rights for Mokdong District 6 after submitting single bids twice, while Hyundai Engineering & Construction became the preferred bidder for Mokdong District 10, which has an estimated construction cost of about 2.61 trillion won, after two solo bids. District 12 also saw only GS Construction participate in the first bidding, resulting in a failure to secure a contractor.While Bidding is Quiet, Brand Lounges are Growing in MokdongThe atmosphere outside the bidding sites is quite the opposite. Mokdong New Town, comprising districts 1 to 14, is expected to transform from 26,629 units to approximately 50,000 units after reconstruction. The total project scale is estimated at around 30 trillion won, making it a key market for major construction firms in the coming years.Hyundai Engineering & Construction opened the 'D.H. Mokdong Lounge' near Mokdong District 10 in March and another near District 7 in May. Daewoo Engineering & Construction has also established the 'Summit Mokdong Lounge,' focusing on districts 8, 11, and 14 as key project sites. DL E&C is using the 'Acro Mokdong Regency' near Omokgyo Station as a base after securing District 6 and is looking into additional projects, including District 14.New entrants are also joining the fray. Lotte Engineering & Construction plans to sequentially open the 'Mokdong Leel Lounge' targeting districts 2, 7, and 14, while IPARK Hyundai Industrial Development is preparing to open the 'IPARK Mokdong Lounge' at the end of this month, focusing on District 11. POSCO E&C is exploring promotional bases in Mokdong, looking at districts 2, 4, and 14. GS Construction is also preparing a separate 'Xi Lounge,' and Samsung C&T is reviewing multiple projects, including districts 5, 9, and 13.Rather than competing fiercely over a single district, construction firms are prioritizing brand recognition across Mokdong and managing multiple projects before selecting the most promising ones.Attention is particularly focused on Districts 7 and 14. Mokdong District 7 involves a reconstruction project that will increase the existing 2,550 units to a maximum of 4,335 units over 49 floors. After receiving approval for the establishment of the association in July, the bid for construction management services to support contractor selection was announced on September 2. District 14, with a post-reconstruction plan for 5,123 units, is the largest in Mokdong. Industry insiders believe these two districts are among the most likely to break the trend of single bids and foster actual competition among major firms.From '70 Million Won Moving Costs' to 'Securing Lounges'The bidding competition is evolving. In 2017, at the Banpo Jugong District 1, 2, and 4, Hyundai Engineering & Construction and GS Construction faced off directly. Hyundai offered 70 million won in moving costs per household to 2,292 members, totaling over 160 billion won. The controversy led the Ministry of Land, Infrastructure and Transport to point out potential legal violations, prompting the association to remove the condition. Ultimately, Hyundai secured 1,295 votes, defeating GS Construction's 886 votes to win the construction rights. This bidding war is often cited as a prime example of extreme cash benefit competition.In 2020, the focus of competition shifted to finance at Banpo District 3. Samsung C&T proposed financing the project cost, including construction costs, at an annual rate of 1.9%, while Daewoo Engineering & Construction offered a fixed interest rate of 0.9% on a project cost of 780 billion won. With options like post-sale and REITs included in the competitive conditions, strategies emerged to reduce the financial burden and sales risks for the association, moving away from simple cash support.This year, the competition at Apgujeong District 5 has become even more intricate. DL E&C proposed a construction cost of 1,139,000 won per 3.3 square meters, a construction period of 57 months, a project cost interest rate of COFIX+0%, a relocation cost LTV of 150%, and a maximum 7-year deferral of contributions. Hyundai Engineering & Construction countered with a construction cost of 1,168,000 won, COFIX+0.49%, an LTV of 100%, and a maximum 4-year deferral of contributions. The bidding competition has expanded beyond brand and design to include the financial costs and project timelines that members will bear.An industry insider noted, “In the past, direct confrontations centered on construction costs and financial conditions, but recently, there has been a stronger tendency to select high-potential areas, secure member connections first, and aim for long-term projects.”* This article has been translated by AI. 2026-09-10 15:32:00 -
Government Increases Budget to 62 Billion Won for Future Industry Components The South Korean government plans to significantly increase its budget to 62 billion won for the development of key components in future industries, including sensors, actuators, and secondary batteries for humanoid robots. This funding aims to support not only core technology development but also the verification of these technologies in real-world environments.On September 10, Deputy Minister of Finance and Economy Heo Jang visited Roboteers in Gangseo-gu, Seoul, to assess the current status of the industry related to humanoid robots and actuators, and to hold discussions with relevant companies.This site visit and meeting were organized to explain the direction of nurturing key components designated under the Super Innovation Economy Leading Project, as well as the main support details in the government’s budget proposal for 2027, while gathering feedback from the industry.The government is pursuing a Super Innovation Economy Leading Project aimed at boosting the potential growth rate of the economy by creating world-class products. In July, it announced a new project for sensors, actuators, and secondary batteries for humanoid robots as part of its economic growth strategy for the second half of 2026, outlining plans to expand support for securing future growth drivers.As a result, the 2027 government budget proposal includes 62 billion won allocated for these three key components, a more than fivefold increase from this year's 11.6 billion won. The overall budget for the Super Innovation Economy Leading Project will also rise from 27 trillion won this year to 36 trillion won next year, marking a 33.5% increase.The government plans to utilize this budget to support the development of technologies that enhance the performance and reliability of key components, as well as to back the verification and improvement of these technologies in actual operating environments.During the visit, demonstrations of humanoid robots showcased the development and application status of key components such as actuators that enable robotic movement. The subsequent meeting provided an opportunity to explain the support direction for major budget projects and to listen to industry representatives' concerns.Participants in the meeting positively evaluated the significant increase in support at a crucial time for securing technological competitiveness in key components for future industries. They expressed that support for core technology development and field verification would help reduce the burden on companies and facilitate commercialization.Deputy Minister Heo stated, "The Super Innovation Economy Leading Project is aimed at enabling our companies to create world-class products and lead the global market, which will in turn contribute to the rebound of our economy's potential growth rate. We will actively support the private sector through the 2027 budget proposal to ensure that key components like sensors, actuators, and secondary batteries for humanoid robots can establish themselves as new growth drivers."* This article has been translated by AI. 2026-09-10 15:32:00
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Musinsa Beauty Opens First Standalone Store in Hongdae, Differentiating with Pharmacy Beauty Musinsa has opened its first standalone beauty store, introducing 'Pharmacy Beauty' to enhance its competitive edge by combining professional pharmacist consultations with beauty shopping.On September 10, Musinsa held a media tour in Hongdae, Mapo District, Seoul, unveiling the 'Musinsa Beauty Hongdae' store, which will officially open on September 11. This marks the first independent beauty store following the beauty zone at the 'Musinsa Megastore Seongsu' opened in April.The store is designed not just as a shopping space but as a destination for customers to discover new brands and products. Kim Yeon-jin, head of the Musinsa Beauty offline team, stated, "Our overarching strategy is 'Next Beauty,' with 'Discovery Channel' as the key concept."The Musinsa Beauty Hongdae store features an eye-catching pink exterior and spans a total area of 1,262 square meters (approximately 400 pyeong), with over 870 brands and more than 12,000 products available.The first floor is dedicated to a variety of makeup and fragrance brands, including a 'Brand Highlighting Zone' that showcases brands that are hard to find offline. This area features brands that have gained attention in the global market but are not easily accessible in South Korea.The second floor focuses on skincare, with products categorized into hair, body, men's, and dental care. This layout allows customers to compare and choose from various brands and products based on their skin concerns and preferences.The store's layout reflects Musinsa's unique differentiation strategy, with wider aisles to enhance customer flow and a branding space that allows for an immersive brand experience. About 70% of the approximately 600 beauty brands in the store are indie brands.Another distinguishing feature is the Pharmacy Beauty concept. The Beauty Onnuri Pharmacy on the basement level is a new pharmacy brand tailored to meet beauty and healthcare demands. Unlike typical beauty stores that sell dermatological cosmetics, this pharmacy occupies an entire floor, integrating beauty retail with pharmacy services.The Beauty Onnuri Pharmacy offers around 270 brands and over 2,000 products, staffed by multiple pharmacists who provide prescription filling and medication consultations. It maintains the core functions of a pharmacy while enhancing its beauty category and professional consultation services.Kim Yeon-jin explained, "The Beauty Onnuri Pharmacy is characterized by increasing the proportion of cosmetics to about 90%, aiming to create a space where customers can address all their beauty-related concerns in one visit through collaboration with the pharmacy."However, operations are strictly separated. The Beauty Onnuri Pharmacy will operate based on product curation and consultations by pharmacists, creating synergy between the store and pharmacy within the same space.Meanwhile, Musinsa plans to open its second standalone beauty store in Seongsu in November and will introduce a combined store with Musinsa Kicks in Jeju.* This article has been translated by AI. 2026-09-10 15:28:10
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Will Bank Deposits Be Converted to CBDC? Debunking Social Media Rumors “Starting in September, money deposited in banks will automatically convert to CBDC.” “By signing up for the Youth Future Savings, you agree to the CBDC conversion.” Recently, such claims have been circulating on social media and online communities. Some have even suggested that individuals should move their salary and living expense accounts elsewhere or disconnect their accounts from open banking and mobile payment services. To clarify, there will be no automatic conversion of money deposited in banks to central bank digital currency (CBDC) starting in September. Additionally, the process of signing up for financial products like the Youth Future Savings does not involve unknowingly participating in a CBDC pilot project through terms and conditions or consent to provide personal information. Concerns surrounding CBDC have persisted since the Bank of Korea began real transaction testing. According to a petition submitted to the National Assembly on September 10, there have been eight petitions opposing the introduction of CBDC since the first real transaction test of Project Han River began in April of last year, accumulating approximately 420,000 signatures. Even during the announcement of Phase 2 of Project Han River in July and August, petitions calling for a cautious approach due to potential personal information exposure and insufficient public consultation continued to emerge. The controversy stems from the digital currency real transaction test, Project Han River, being pursued by the Bank of Korea and the banking sector. In Phase 1, the Bank of Korea issued an “institutional CBDC” for transactions between financial institutions, and banks tested whether they could issue “deposit tokens” based on this to facilitate actual payments and transactions. Phase 2 will expand the scope of the experiment. Nine banks, including KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup, IBK, Busan, Gyeongnam, and iM Bank, will participate to test not only payments but also peer-to-peer transfers and automatic deposit and withdrawal conversions. One expression that has fueled misunderstandings is “automatic deposit and withdrawal conversion.” It may sound like banks will arbitrarily tokenize customers' account funds, but the actual function is different. When a customer participating in the pilot project makes a payment or transfer using deposit tokens, if the balance in their token wallet is insufficient, only the necessary amount will be drawn from their linked deposit account and converted into deposit tokens. This does not mean that the entire balance of a salary or savings account will be automatically tokenized. The tokens used by consumers are not CBDC issued directly by the Bank of Korea but deposit tokens issued by the respective banks based on customer deposits. The claim that cash in an account will suddenly change to CBDC is fundamentally different. Claims related to the Youth Future Savings are also inaccurate. Signing up for policy financial products and participating in Project Han River are separate processes. Simply enrolling in the Youth Future Savings or receiving government support does not mean that the deposits in that account will be converted to CBDC or deposit tokens. Consent for providing personal and financial information during the financial product enrollment process is distinct from consent to participate in the digital currency pilot project. There will be no immediate changes to existing financial services. Customers not participating in Project Han River can continue to use their salary accounts, living expense accounts, savings, and loan accounts as they do now. There will be no changes to how salaries are deposited or how account balances are displayed. Merely linking accounts to open banking or mobile payment services like KakaoPay and Naver Pay does not mean participation in Project Han River. Existing account linking services and the deposit token pilot project are separate services. The banking sector believes that if deposit tokens become established as actual financial services, there could be changes in payment methods centered around account transfers, cards, and mobile payments. However, Phase 2 of Project Han River is not the formal introduction of CBDC but a pilot project to verify the payment and transfer functions of deposit tokens issued by banks based on institutional CBDC. Therefore, there is nothing immediate that consumers need to do. There is no reason to move accounts or forgo signing up for the Youth Future Savings due to concerns about CBDC, nor is there a need to disconnect accounts linked to open banking or mobile payments. 2026-09-10 15:24:00
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U.S. Companies Increasing Investments in China Amid Optimistic Business Outlook U.S. companies operating in China are showing a notable recovery in their business outlook, attributed to the U.S.-China trade truce and efforts to manage conflicts.The American Chamber of Commerce in Shanghai reported on September 10 that 58% of responding companies are optimistic about their business prospects in China over the next five years, a 17 percentage point increase from last year. This marks a significant rebound in confidence among U.S. businesses in China, which had reached a record low during the four years following the COVID-19 pandemic.Performance has also improved, with approximately 78% of companies reporting operating profits in China last year, the highest level since 2019. This increase in profitability is believed to have boosted companies' confidence in their operations in China.Notably, the primary business risk perceived by U.S. companies in China has shifted. The survey found that 68% of respondents identified competition with local Chinese firms as a major challenge, up 5 percentage points from last year. In contrast, 53% cited deteriorating U.S.-China relations as a key issue, a decrease of 13 percentage points. For the first time since 2022, competition within China has emerged as a more significant business challenge than U.S.-China tensions.Investment intentions have also improved, with 28% of companies reporting increased investments in China last year, the highest level in four years. Analysts suggest that uncertainties surrounding U.S. tariff policies toward China, as well as tariffs on other countries, have enhanced China's relative attractiveness for investment. Additionally, 39% of companies indicated they would redirect funds intended for investment in China to other markets, an 8 percentage point decrease from last year, marking the lowest level in recent years.Jeffrey Lehman, chairman of the American Chamber of Commerce in Shanghai, stated, "The recent stabilization of U.S.-China relations has led to positive changes. Both countries should leverage the current atmosphere of dialogue to establish a stable and transparent institutional framework."* This article has been translated by AI. 2026-09-10 15:24:00
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Hanwha Systems unveils space AI solution at Poland defense expo SEOUL, September 10 (AJP) - Hanwha Systems has unveiled an artificial intelligence-powered satellite imagery analysis solution overseas for the first time, as the South Korean defense company seeks to expand its presence in the global space and defense markets. The company said Thursday it introduced its "Space AI Solution" at MSPO 2026, a major defense exhibition held in Kielce, Poland, on Wednesday. During the launch event, Hanwha demonstrated the system analyzing imagery of Eastern Europe captured by satellites currently in operation, rather than using simulated data. The solution uses AI to analyze imagery transmitted from various satellites and extract key intelligence, automatically performing tasks such as object detection, pattern analysis and anomaly detection to support faster decision-making by commanders and other users. A key feature is its ability to integrate the entire process from satellite image collection and AI-based data fusion to providing information for commanders' decisions. The system can be used to track troop movements and routes, while in disasters it can analyze changes to buildings and terrain to rapidly assess damage before and after an event. The system supports both electro-optical, or EO, imagery and synthetic aperture radar, or SAR, data. SAR satellites can capture imagery regardless of weather or daylight, but their radar images are harder to interpret. Hanwha said its AI can identify aircraft, ships and vehicles within seconds and combine SAR data with higher-resolution EO imagery. The technology is designed to support Hanwha's SAR satellite lineup, including a 0.15-meter very low Earth orbit satellite under development, and can link satellite reconnaissance with weapons systems such as the K9 howitzer and Chunmoo multiple rocket launcher. "By combining EO and SAR imagery, the Space AI Solution turns satellite data into immediately usable reconnaissance and tactical intelligence," a Hanwha Systems official said. "We aim to expand this into an integrated space-to-ground infrastructure and strengthen our presence in the global defense and space markets." AJP Takeaways - Hanwha Systems unveiled its AI-powered satellite imagery analysis solution at MSPO 2026 in Poland. - The system combines EO and SAR imagery to detect objects, track movements and support faster military decision-making. - Hanwha plans to link the technology with SAR satellites and weapons systems such as the K9 howitzer and Chunmoo launcher. 2026-09-10 15:20:05 -
Justice Minister Nominee Kim Seung-won Investigated for Alleged Favoritism Kim Seung-won, the nominee for Minister of Justice, is under investigation for allegedly soliciting approval for a COVID-19 treatment from the pharmaceutical company Genensel. It has also come to light that he inquired about a treatment from Bukwang Pharmaceutical.According to documents released by Kim Tae-kyu of the People Power Party on September 10, Kim Seung-won, while serving as a member of the National Assembly, requested information from the Korea Food and Drug Administration (KFDA) on June 7, 2021, regarding the conditional approval process for Bukwang Pharmaceutical's 'Levovir,' which was being developed as a COVID-19 treatment.Originally developed as an antiviral drug for hepatitis B, Bukwang's Levovir received approval for Phase 2 clinical trials amid the COVID-19 pandemic. However, the company ultimately abandoned the development in September of the same year after failing to demonstrate sufficient therapeutic efficacy during the trials. Kim Seung-won made his inquiry while Bukwang was actively pursuing the treatment's development.Kim Seung-won continued to request information related to pharmaceuticals. Two months later, on August 17, 2021, he again contacted the KFDA for detailed information on the approval status, usage, and application methods of COVID-19 antibody treatments that were in use by the government at the time.Notably, an examination of the 35 requests made by Kim Seung-won to the KFDA from 2020 to this year revealed that inquiries related to pharmaceuticals were concentrated in 2021. Outside of that year, his major requests primarily concerned issues unrelated to drug approvals, such as health and safety enforcement statistics and operational status of government vehicles.In October of the same year, Kim Seung-won contacted then-KFDA Commissioner Kim Kang-rip at the request of broker Yang Mo, asking for expedited processing of Genensel's clinical trial approval for its COVID-19 treatment.Genensel submitted its application for Phase 2/3 trials on September 23, and Kim Seung-won reached out on October 12, during the KFDA's request for additional information. Following his contact, the KFDA quickly moved forward with the review process, instructing relevant officials to report on the progress. Genensel received final approval on October 26. The former commissioner reportedly stated during a prosecution investigation that it was unusual for a member of the National Assembly to specifically mention a particular company.There are differing interpretations regarding the approval timeline for Genensel. According to the KFDA's official standards (excluding the time for the company to provide additional information), the processing time was 11 days, which is similar to the overall average of 10.8 days at that time. However, when including the entire calendar days from submission to approval, Genensel's process took 33 days, significantly shorter than the average of 60 days.Kim Tae-kyu, who raised the allegations, stated, "If Kim Seung-won contacted the KFDA commissioner while the review was ongoing and approval followed shortly after, it raises suspicions. The bigger issue is that his interest was not limited to Genensel; he must clarify the background of his requests for approval processes and statuses of other COVID-19 treatments under his office's name."However, Kim Seung-won's team has previously issued a rebuttal regarding the allegations of favoritism toward Genensel.The personnel preparation team stated in a press release on September 5, "After reviewing data indicating therapeutic efficacy from overseas Phase 2 clinical trials, we simply conveyed a complaint to the KFDA commissioner to ensure that the clinical trial procedures for domestic treatments were not unjustly delayed. We were unaware that the Genensel representative had omitted or manipulated some animal test data, and there is no evidence that we were involved in that."Regarding the unusually rapid approval speed for the clinical trial plan, they added, "When considering only the actual data review period, it was not faster than average; in fact, it took longer."* This article has been translated by AI. 2026-09-10 15:20:00
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Uiwang Mayor Kim Seong-je urges focus on citizen safety and quality waterfront spaces Kim Seong-je, the mayor of Uiwang, Gyeonggi Province, visited the Anyangcheon local river maintenance project site to inspect the progress and safety management ahead of its completion next month. He reiterated his commitment to prioritizing citizen safety while transforming Anyangcheon into a prominent waterfront space for public use. On September 9, Mayor Kim toured the Uiwang section of Anyangcheon, examining key construction areas from the Owu Bridge to the Gocheon 4 Bridge, Gwangmyeong Bridge, and Gocheon Scenic Park. During the visit, he received updates from construction officials on the progress and management status, and personally checked the construction conditions and safety measures of river facilities in preparation for potential disasters such as heavy rainfall. Mayor Kim expressed particular interest in the river's flood control capabilities and the convenience for citizens, inspecting the development of key facilities such as parks, walking paths, and bike lanes. He urged, "Please ensure thorough safety management on-site until the end and meticulously oversee the planned construction to ensure it is completed without any issues." The Anyangcheon local river maintenance project has been underway since 2022, targeting a 3.13 km stretch from the Uiwang-Gunpo boundary to Wangok-dong in Uiwang. The main objectives include enhancing flood safety, maintaining river facilities, improving water quality, and creating waterfront spaces. This project aims to create a livable waterfront space where citizens can stay, walk, and enjoy, going beyond just ensuring river safety. Mayor Kim plans that once the project is completed in October, Anyangcheon will transform into a disaster prevention area that ensures citizen safety and a recreational space for walking and leisure, becoming a key waterfront axis for balanced urban development and improved quality of life in Uiwang. He remarked, "Anyangcheon is more than just a river; it is a valuable living space that adds relaxation and leisure to citizens' daily lives." He emphasized, "We will carefully develop waterfront spaces, including walking paths, bike lanes, and parks, to ensure citizens can use them more conveniently and comfortably."* This article has been translated by AI. 2026-09-10 15:20:00
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Nexon opens Mabinogi Mobile to outside AI agents SEOUL, September 10 (AJP) - Nexon will let its cross-platform role playing game "Mabinogi Mobile" players hand routine chores to outside AI agents such as Claude Code, while keeping trading, payments and character growth off-limits. The feature, called AI Connector, will first arrive as a beta on the role-playing game's PC version in an upcoming update, its operators said in a notice posted Wednesday. It is switched off by default and works only with AI tools players install themselves. Once connected, players can ask an agent about their currency, location or unfinished daily missions without opening a single menu. A request to collect 20 pieces of wool sends the character off to gather it, and the agent can also travel to a facility to craft items. "We believe this feature should not become a tool that plays the game in place of players," the operators said. Agents are barred from the in-game exchange, payments, the cash shop and guild management. The agents also cannot send one-on-one messages or discard items. Chat messages drafted by an agent go out only with the player's approval and carry an AI icon beside the character's name. Other players' character names, guild names and chat logs are withheld from AI tools, according to the notice. The operators described the feature as taking only its first step and said they would widen its scope cautiously after watching how players use it. Bringing the tools to mobile devices remains technically difficult for now, they added. AJP Takeaways - Nexon said on Sept. 9, 2026, that "Mabinogi Mobile" will add AI Connector, a beta feature linking the game's PC version to third-party agentic AI tools including Claude Code, Cursor and Gemini CLI. - Players can query game data and delegate gathering, processing and crafting, but the exchange, payments, guild management and character growth remain closed to AI agents. - AI usage fees are borne by players, an hourly presence check curbs idle play, and Nexon said it will expand the feature gradually after observing real-world use. 2026-09-10 15:18:57 -
BOK sees chip windfall spreading, inflation risks rising SEOUL, September 10 (AJP) - South Korea's exceptional chip windfall, already swelling corporate profits and public finances, is likely to reach households with a lag and can bolster not just consumption but also housing demand and inflation, the Bank of Korea (BOK) reiterated Thursday. The central bank said in its September Monetary Policy Report pointed to the first-half nominal gross domestic product that grew about 22 percent, the first increase above 20 percent since the early 1990s. Improved terms of trade contributed about 15 percentage points to the increase, compared with 3.8 percentage points from real growth and 3.1 percentage points from the domestic demand deflator. The improvement was largely driven by export prices, with DRAM and NAND flash memory prices rising three to five times from a year earlier. Prices of other IT products, chemicals and primary metals increased between 10 percent and 40 percent. The BOK said the current episode differs from previous periods of rapid nominal growth because rising export prices, rather than rapid real growth or domestic inflation, have been the dominant driver. Even during the 2015 - 2017 semiconductor upcycle, increases in export prices and the terms of trade were only about 20 percent and 50 percent, respectively, of the magnitude seen this time. The income gains are already visible in corporate earnings, investment and government revenue. Sales at IT companies, including semiconductor makers, jumped 76 percent in the first quarter, while their operating profit margin reached 42 percent. Facility investment increased more than 20 percent from a year earlier in both June and July. National tax revenue rose 17.4 percent from a year earlier to KRW 223 trillion ($165 billion) in the first half, with the central bank expecting stronger semiconductor earnings to lift corporate tax receipts further. The spillover to households, however, has been slower. Nominal wage growth eased to 2.1 percent in the second quarter from 3.4 percent in the first. The BOK said the sharp rise in nominal growth has yet to translate into a broad improvement in household income conditions. Deputy Governor Park Jongwoo said the BOK's baseline assessment was that the semiconductor windfall would spread through the broader economy with a lag rather than remain confined to chip companies and related workers. Park said the unusually large scale of the income gains meant the effects were likely to appear first in regions benefiting directly from the semiconductor boom before spreading through channels including tax revenue. A longer-than-expected transmission lag, however, could limit the impact. He pointed to nominal gross national income as an indication of the scale of the income shock. Its growth exceeded 17 percent from a year earlier in the first quarter and reached 26.4 percent in the second, he said. Increases of that magnitude were more reminiscent of Korea's high-growth era and were changing the underlying conditions for consumption, asset markets and monetary policy, Park said. The household effect could become more visible next year, with the BOK estimating that bonus payments by major semiconductor companies alone could raise overall nominal wage growth by about 3 percentage points. Stronger household income would support consumption and the domestic recovery but could also intensify demand-side inflation. The BOK estimated that when the output gap is positive, the effect of a demand shock on core inflation is two to three times greater than when the output gap is negative. The effect also lasts three to four quarters longer. The eventual inflation impact will depend on how much of the additional income flows into domestic consumption rather than savings or asset purchases, the central bank said. Choi Chang-ho, director general of the BOK's Monetary Policy Department, said the unusually wide gap between income and production indicators was one reason the central bank was paying greater attention to nominal growth. Nominal income and real growth generally move in similar directions, Choi said. Income not immediately reflected in real growth could eventually feed into domestic demand and inflation or flow into asset markets, worsening financial imbalances. Housing is one potential channel. The BOK said large semiconductor bonuses could increase home-buying demand in areas benefiting directly from the chip boom, adding upward pressure to housing prices in the Seoul metropolitan area. Bonus payments and expectations for expanded employee housing loans have already coincided with steep price gains in Hwaseong's Dongtan district and other areas described in the report as the country's "semiconductor belt." Rapid nominal GDP growth could mechanically lower Korea's household debt-to-GDP ratio, but improved purchasing power could simultaneously increase housing demand and leverage. The BOK estimated that the household debt ratio could fall toward the lower end of the 80-to-85-percent range this year if nominal GDP grows between 15 percent and 20 percent. Korea remained sixth-highest among 44 economies tracked by the Bank for International Settlements at the end of 2025. The BOK raised its benchmark rate by 25 basis points in both July and August to 3.00 percent as stronger growth, persistent inflation and financial-stability risks increasingly pointed toward tighter policy. Park said the consecutive increases should restrain inflation with a lag, while improving income conditions could work in the opposite direction by strengthening demand. It is too early to determine which effect will ultimately prove stronger, he said. The central bank said it will determine the timing and pace of additional rate increases while monitoring inflation, growth and financial-stability conditions. AJP Takeaways - South Korea's nominal GDP grew about 22 percent in the first half, driven largely by soaring semiconductor export prices and improved terms of trade. - Corporate earnings, investment and tax revenue are already benefiting, while the improvement in household income has emerged more slowly. - The BOK expects the semiconductor windfall to spread through the wider economy with a lag rather than remain confined to chip companies and related workers. 2026-09-10 15:17:24