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Samsung's Lee buying $1.4 billion shares from mother SEOUL, September 09 (AJP) - Samsung Electronics Chairman Lee Jae-yong is buying nearly 1.94 trillion won ($1.4 billion) worth of shares in the technology giant held by his mother, Hong Ra-hee, in an off-market transaction next month, according to a regulatory filing Wednesday. Lee plans to acquire 7,188,793 common shares from Hong, honorary director of the Leeum Museum of Art, at Wednesday’s finishing price of 269,500 won putting the planned transaction at 1.937 trillion won, said the filing issued after the market closed in Seoul. The transaction is scheduled to settle on Oct. 12 and is described in the filing as an acquisition of shares from a related party. Lee currently owns 97,551,953 Samsung Electronics shares, equivalent to a 1.47 percent stake. Upon completion of the planned purchase, his holdings would increase to 104,740,746 shares, raising his ownership to 1.58 percent. The shares to be acquired represent about 0.11 percent of Samsung Electronics' outstanding shares. The filing did not specify a broader purpose for the transaction beyond acquiring shares from a related party, nor did it disclose how Hong intends to use the proceeds. Hong nevertheless is expected to use the proceeds to repay loans from financial institutions that she took out to fully cover inheritance taxes stemming from the estate of late Samsung Group Chairman Lee Kun-hee. The family is also seen as having chosen a direct off-market transaction between major shareholders to minimize the potential impact on Samsung Electronics’ share price that could result from a large sale on the open market. AJP Takeaways: - Samsung Electronics Chairman Lee Jae-yong plans to buy 7.19 million Samsung Electronics shares from his mother, Hong Ra-hee, in an off-market transaction. - The planned deal is valued at 1.94 trillion won based on Samsung Electronics' Sept. 8 closing price. - Lee Jae-yong's stake is expected to rise to 1.58 percent from 1.47 percent after the transaction September 9, 2026 1 -
Japan Emerges as a Key Hub for Semiconductor Production and R&D Japan is re-emerging as a global hub for semiconductor production and research and development (R&D). Analysts suggest that the ecosystem of materials, components, and equipment is a strong enough incentive to overlook the risks posed by earthquakes.According to industry sources, Samsung Electronics has opened a next-generation semiconductor packaging R&D center in Minato Mirai, Yokohama. The company plans to invest 40 billion yen (approximately $329 million) by 2028, with half of that amount supported by the Japanese government. A total of 95 researchers from South Korea and Japan will work at the facility, which aims to expand joint development with local materials and equipment companies and research institutions.SK Hynix is also considering establishing a factory in Japan. Local media have reported on the potential for a memory production base in Japan, following discussions in February and again last month. While SK Hynix denied the rumors in February, it acknowledged last month that it is exploring various options, including securing additional production bases, although no decisions have been finalized. Chey Tae-won, chairman of SK Group, has indicated that he is reviewing multiple candidate sites in Japan, suggesting that the investment discussions are serious.Some argue that Japans frequent earthquake risks make it an unsuitable location for semiconductor factories. A 7.1 magnitude earthquake struck Kumamoto on July 28, causing TSMCs subsidiary JASM and production facilities of Sony and Renesas to halt or reduce operations.However, many view the earthquake risk as manageable. TSMCs Kumamoto plant resumed normal production on August 3 after equipment inspections. Sony significantly shortened its recovery time from the 2016 earthquake, which had taken over three months, thanks to improved seismic reinforcement and repeated training based on past disaster experiences.Japans competitive edge in semiconductor materials, components, and equipment is a significant advantage. According to data from Japans Ministry of Economy, Trade and Industry, Japanese companies hold 31% of the global semiconductor manufacturing equipment market and 48% of the major materials market. Shin-Etsu Chemical and SUMCO are among the top two global suppliers of silicon wafers, while Tokyo Ohka Kogyo is a leader in photoresists. Ajinomotos subsidiary supplies about 95% of the global market for advanced packaging substrate insulation materials.In the era of AI semiconductors, the importance of proximity in collaboration has increased. As it becomes more challenging to enhance performance solely through advanced processes, the utility of high-bandwidth memory (HBM) and advanced packaging that combines multiple chips has grown. The need for chip manufacturers and materials and equipment companies to align material properties and processes from the early stages of development has heightened the value of research hubs close to suppliers. This industrial shift is cited as a reason for Samsungs decision to expand its packaging R&D base in Japan before establishing production lines.The Japanese governments support is also a crucial factor. The Yokohama research centers investment is half funded by the government. Japan has allocated up to 732 billion yen in support for TSMCs second Kumamoto plant and plans to invest over 10 trillion yen in public support for the AI semiconductor sector by 2030. This strategy aims to attract foreign companies, connect them with domestic suppliers, and stimulate further related investments.The supply chain conflict between South Korea and Japan, which arose from Japans export restrictions on semiconductor materials in 2019, has also shifted. The two countries normalized related regulations in 2023. While the risk of concentrating supply chains in one country remains, industry experts emphasize that as AI competition accelerates, the speed of joint development with necessary materials and equipment companies has become increasingly important.Kim Yang-pyung, a senior researcher at the Korea Institute for Industrial Economics and Trade, stated, The semiconductor industry has limitations in processing all operations within a single country, unlike in the past. We must explore growth strategies through collaboration with Japan.* This article has been translated by AI. September 9, 2026 1 -
Semiconductor Industry Faces Challenges Amid Global Competition There is a growing call for South Korean semiconductor companies to strengthen their position within the global ecosystem to maintain their competitive edge. Concerns have been raised about potential technology leaks and domestic job losses as Samsung Electronics and SK Hynix expand overseas, but experts emphasize that strategic territorial expansion is urgent.According to industry sources, TSMC announced in January plans to increase its overseas production base from 15% in 2030 to 20% by 2036. Micron has also diversified its key production lines beyond the U.S. to locations in Taiwan, Singapore, and Hiroshima, Japan.In contrast, most of South Korean companies core memory production lines remain concentrated domestically. While Samsungs advanced foundry in Taylor, Texas, and SK Hynixs packaging facility in Indiana are underway, overseas memory production sites are limited to general products and backend processes in Xian and Wuxi, China. The critical front-end production for next-generation advanced memory processes is still entirely handled by domestic campuses in Pyeongtaek, Icheon, and Yongin.Plans for overseas expansion by these companies are also hindered by concerns from the government and political circles. In June, then-Prime Minister Kim Min-seok stated, The priority should be finding ways to make it work in Korea, rather than saying if it doesnt work in Korea. He criticized SK Group Chairman Chey Tae-won’s comments about considering overseas investments due to challenges like power and water shortages in Korea.However, experts warn that an approach characterized by semiconductor isolationism, which insists on domestic production citing potential technology leaks, could weaken competitiveness. They argue that such a stance may lead to isolation during the global supply chain restructuring.According to the Korea International Trade Association and the Bank of Korea, the domestic localization rate of semiconductor equipment is only about 20%, with reliance on imports from the U.S., Japan, and the Netherlands exceeding 70% for key equipment. In a situation where it is difficult to independently establish the entire process of materials, equipment, and packaging, simply increasing domestic fabs without collaboration with global hubs has clear limitations.Yoon Jeong-hyun, a senior researcher at the Institute for National Security Strategy (INSS), explained, If the state and companies become overly nationalistic about technology, they will prioritize strengthening domestic capabilities over cooperation, which risks leading to exclusive protectionism.This is also a timely opportunity for South Korean semiconductor companies to boldly expand their overseas territories. As of the first half of this year, the combined cash and cash-equivalent assets of Samsung Electronics and SK Hynix approached 278 trillion won, marking the highest level of financial resources available. Unlike in the past, when financial difficulties hindered overseas investments, they now have the capacity to secure global hubs.Major countries are also extending significant incentives. The U.S. is actively attracting advanced fabs with high tariffs and subsidies, while Japan is offering cash support covering up to 50% of factory construction costs to draw global semiconductor companies.Ahn Gi-hyun, executive director of the Korea Semiconductor Industry Association, stated, Expanding territories by leveraging overseas subsidies and favorable location conditions is a strategy to enhance global market dominance, not a risk of technology leakage. It is time to make policy decisions to break free from the frame of protectionism and strengthen ties with the global ecosystem.* This article has been translated by AI. September 9, 2026 1
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Semiconductor Giants Compete for Ground in Japan Global semiconductor companies are intensifying their competition for footholds in Japan, highlighted by Samsung Electronics recent establishment of an advanced packaging research and development (R&D) center in Yokohama. Following the setup of production bases by Taiwans TSMC in Kumamoto and the U.S.s Micron in Hiroshima, Samsung is focusing on the Kanto region while SK Hynix is eyeing the Tohoku area for strategic locations.According to industry sources, Samsung opened its Advanced Package Lab (APL) in Yokohama, Kanagawa Prefecture, adjacent to Tokyo. The area is home to universities, research institutions, and advanced packaging material and equipment companies like Resona and Disco. Samsung plans to collaborate with over 50 local companies to expedite the development of next-generation packaging technologies through material evaluation and prototype production.Similarly, Miyagi Prefecture is being considered as a production base for SK Hynix. The region hosts suppliers like Tokyo Electron and has a strong academic-industrial foundation with Tohoku University. Additionally, the vicinity of Sendai offers large industrial sites along with water and power infrastructure.Notably, just north of Miyagi in Iwate Prefecture is Kioxias Kitakami NAND factory, which SK Hynix has mentioned as a potential collaboration point. Kioxia operates this facility along with two others in Mie Prefecture and has recently announced an investment of over 1 trillion yen (approximately $8.7 billion) to build a new semiconductor plant at the Kitakami site.SK Hynix is the largest single shareholder of Kioxia, holding 14.17% of voting rights through a special purpose company (SPC). Chey Tae-won, chairman of SK Group, has recently suggested exploring options for joint production, R&D, and supply chain sharing with Kioxia. Choosing Miyagi could allow SK Hynix to connect with the local supply chain ecosystem while avoiding overlap with existing production facilities.Previously, TSMC established a foundry production base in Kumamoto, while Micron set up a DRAM production and R&D center in Hiroshima. The Japanese government has committed up to 1.208 trillion yen (approximately $10.3 billion) in support for TSMCs factory and up to 536 billion yen (approximately $5.7 billion) for Microns facility. As latecomers, Samsung and SK Hynix aim to find regions that meet their specific needs for workforce, supply chain, water and power resources, and research institutions, rather than joining existing large production bases.Lee Jong-hwan, a professor at Sangmyung University’s Department of System Semiconductor Engineering, stated, SK Hynix appears to be pursuing a strategy to enhance its NAND competitiveness and production volume through collaboration with Kioxia, solidifying its position as the top memory producer. Meanwhile, Samsung may find it more advantageous to strengthen R&D partnerships with local suppliers that have superior technology rather than establishing production lines in Japan.* This article has been translated by AI. September 9, 2026 1
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Lee Jae-yong Purchases 7.18 Million Shares of Samsung Electronics from Mother Hong Ra-hee for 1.9 Trillion Won Lee Jae-yong, the chairman of Samsung Electronics, has purchased 7.18 million shares of the company from his mother, Hong Ra-hee, the honorary director of the Leeum Museum, for approximately 1.9 trillion won. This transaction is believed to be aimed at repaying loans incurred during the inheritance tax payment process following the death of the late Lee Kun-hee, former chairman of Samsung.On September 9, Samsung Electronics announced that a transaction had taken place between major shareholders, with Hong Ra-hee selling 7.18 million shares to Lee Jae-yong. The deal is valued at around 1.9 trillion won, representing about 0.11% of the total issued shares of Samsung Electronics.The transaction was conducted as a private deal between Hong and Lee. A Samsung Electronics representative stated, As this is a transaction between major shareholders, we do not have an official position to disclose on behalf of the company.Industry analysts believe that Hong Ra-hee sold part of her shares to repay the loans incurred during the inheritance tax payment process. The Samsung family has been making installment payments on the inheritance tax related to the shares and real estate inherited after the late chairmans passing.By selling the shares directly to Lee Jae-yong instead of on the open market, it is interpreted as an effort to minimize the impact on the market. A large volume of shares worth over 1 trillion won could potentially exert pressure on Samsung Electronics stock price if released all at once.As a result of this transaction, Lee Jae-yongs ownership stake in Samsung Electronics will see a slight increase. However, since the shares involved represent only 0.11% of the total issued shares, the impact on the governance structure of the Samsung Group is expected to be limited.* This article has been translated by AI. September 9, 2026 1
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Samsung and Naver Enter European Sovereign AI Market Through MistralAI Samsung Electronics and Naver have jointly entered the European sovereign artificial intelligence (AI) market through the French company MistralAI. This move is seen as a significant addition to the global AI competition, traditionally dominated by the U.S. and China, with South Korean companies establishing a third pillar centered in Europe.According to the IT industry on September 9, Samsung Electronics and Naver Cloud formed a partnership with MistralAI during a Korea-France business roundtable held at the Élysée Palace in Paris on September 8.Samsung Electronics signed an investment agreement with MistralAI under the name of Vice President Lee Jong-myung, while Naver agreed to explore joint global market entry strategies based on their partnership targeting the sovereign AI market.The investment led by Samsung Electronics is part of MistralAIs Series D funding round, raising €3 billion (approximately 4.7 trillion won). This is the largest equity investment ever secured by a European tech company, pushing MistralAIs valuation beyond €21 billion (about 33 trillion won). Samsung led the round in collaboration with the EUs ScaleUp Europe Fund and existing investor PSG Equity, with new investors Advent and the Grand Duchy of Luxembourg joining, while ASML, NVIDIA, and Salesforce Ventures participated as existing investors.Samsungs investment goes beyond mere equity acquisition. MistralAI is expanding its business scope beyond model and inference services to include its own computing infrastructure. As a supplier of semiconductors and memory, Samsung stands to benefit directly as demand for AI infrastructure in Europe grows. Analysts in the investment banking sector suggest that this round is more of a strategic investment aimed at securing semiconductor demand due to the expansion of AI infrastructure in Europe rather than just a financial investment.Navers approach differs from that of Samsung. Naver Cloud had already established a comprehensive partnership with MistralAI in the manufacturing AI sector on July 8. This recent agreement extends their collaboration beyond manufacturing to encompass the entire global sovereign AI business. MistralAI has built a strong reference base with major European manufacturers such as Airbus, BMW, and ASML, and Naver plans to integrate its cloud infrastructure with these references to achieve success in domestic manufacturing before expanding into global markets.When viewed together, the two agreements reveal a dual-track strategy for South Korean companies entering Europe, focusing on capital and business. Samsungs strategy involves securing access to MistralAIs growth and semiconductor demand through equity investment, while Naver aims to transplant proven industrial AI use cases validated in Europe into domestic and international markets through cloud and infrastructure collaboration. This structure allows for simultaneous entry into the European market through different axes of semiconductor hardware and cloud software with the same partner.MistralAI is recognized as a leading independent supplier representing Europe in the AI model market, which has been dominated by U.S. tech giants like OpenAI and Google, as well as Chinese companies like Alibaba. With Samsung and Naver combining their capital and business interests with MistralAI, South Korea is positioning itself to expand its own collaborative axis outside the U.S.-China-centric AI competition, leveraging its semiconductor and infrastructure competitiveness.Lee Jong-ho, a professor at Seoul National University and former Minister of Science and ICT, stated, “It is very appropriate for South Korea to collaborate with a leading European company to effectively compete in the AI sector without necessarily excluding or countering the U.S. and China. The important thing is to establish a third-tier AI capability.” September 9, 2026 1
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KOSPI Recovers 7000 Points After 34 Trading Days, Boosted by AI and Semiconductor Stocks The KOSPI index has reclaimed the 7000-point mark for the first time since July 23, recovering after 34 trading days. On September 9, the index closed at 7051.64, up 1.40% from the previous trading day, driven by gains in artificial intelligence (AI) and semiconductor stocks. Despite external challenges such as rising oil prices from the Middle East and increasing U.S. Treasury yields, institutional investors net buying of over 900 billion won absorbed significant selling from individual investors.According to the Korea Exchange, individual and foreign investors sold a net 2.4971 trillion won and 170.2 billion won, respectively, while institutions purchased a net 900.5 billion won. The KOSDAQ also rose, closing 2.28% higher at 830.37.Semiconductor stocks led the markets rise, with the Philadelphia Semiconductor Index (SOX) increasing by 1.3% overnight, marking its fourth consecutive day of gains. SK Hynix saw a 3.51% increase, fueled by ongoing expectations for AI growth and memory demand, which also benefited companies like Samsung Electro-Mechanics, which rose by 2.48% as part of the AI infrastructure value chain.According to Kang Jin-hyuk, a researcher at Shinhan Investment Corp, As top-down and bottom-up factors are in a tug-of-war, we saw a rebound in buying following the previous days decline, alongside strong performance in AI infrastructure. The momentum from GPT-6 Astras memory continues, leading to strength in the AI value chain centered around Samsung Electronics and SK Hynix.The upward trend that began in semiconductors spread across various sectors. Stocks in secondary batteries, such as Samsung SDI (up 8.30%) and LG Energy Solution (up 6.46%), gained on expectations of benefiting from U.S. measures against Chinese battery companies. Additionally, Hanwha Oceans announcement of being selected as the preferred bidder for a 680 billion won Thai frigate project boosted shipbuilding stocks, while rising oil prices led to gains in refining and chemical stocks like SK Innovation (up 11.23%) and S-Oil (up 4.08%).Market analysts believe that despite ongoing external uncertainties, the performance and demand momentum of AI-related stocks will provide upward momentum for the domestic stock market. They are particularly focused on whether the KOSPI can stabilize above the 7000-point level as sector-specific positive news leads to a rotation of investments.Lee Kyung-min, a researcher at Daishin Securities, stated, Despite unstable external conditions, the growth potential and demand momentum of AI have acted as upward pressure on related sectors. The rotation of investments based on sector-specific positive news has led to a differentiated market performance.In the Seoul foreign exchange market, the won-dollar exchange rate closed at 1336.1 won, down 9.5 won from the previous trading day.* This article has been translated by AI. September 9, 2026 1
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KOSPI tops 7,000 as fiber trade lifts Seoul and Tokyo SEOUL, September 09 (AJP) - A fiber-optic supply contract signed in the United States reshaped trading across Northeast Asia on Wednesday, lifting cable and wire makers in both Seoul and Tokyo. The rally carried South Korea's benchmark KOSPI to its first close above 7,000 since July 23. The KOSPI rose 97.12 points to 7,051.64, a gain of 1.4 percent. The KOSDAQ, South Korea's secondary board for smaller and technology-focused companies, climbed 18.49 points to 830.37, up 2.3 percent. Retail investors sold the whole way up. Individuals unloaded a net 2.2875 trillion won ($1.71 billion) on the main board. Foreign investors turned seller for the first time in five sessions, shedding 435.0 billion won ($325.5 million) to snap a four-session buying run that had underpinned September's recovery. Institutions bought a net 941.7 billion won ($704.7 million). The trigger came from outside all three markets. U.S. glassmaker Corning said it had signed a long-term optical fiber supply agreement with Verizon, according to Japanese market wire Fisco. The deal covers more than 80 million miles of high-density fiber from 2027 through 2032, a multi-year order worth billions of dollars. Corning shares rose 7.5 percent in New York. Tokyo moved first. Furukawa Electric, Japan's second-largest wire and cable maker and a supplier of data-center fiber, jumped 12.6 percent to 4,129 yen. Gaon Cable rose 16.7 percent to 265,000 won ($198.3), on expectations for bus duct and power distribution cable used inside artificial intelligence data centers. Electrical products led KOSPI sectors, up 7.2 percent. The same trade ran through Shanghai in its rawest form. The Shanghai Composite added 17.43 points to 3,957.98, up 0.4 percent, with copper producers leading. Jiangxi Copper gained 2.0 percent to 49.49 yuan and Zijin Mining 1.7 percent to 34.42 yuan. Copper settled at $14,737.00 a metric ton on Sept. 8, up $197.00. Underneath the cable bid, South Korea's memory chips did the heavy index lifting, and they did it unevenly. SK hynix rose 3.5 percent to 1,856,000 won ($1,388.8). It touched 1,883,000 won intraday. Samsung Electronics did not move at all, closing unchanged at 269,500 won ($201.7). That gap is the session's quiet signal. Traders read the day's chip bid as high-bandwidth memory demand rather than a broad memory upcycle, and SK hynix is the direct expression of it. Batteries provided the other leg. SK innovation surged 11.2 percent to 153,500 won ($114.9), its fourth double-digit move in seven sessions, with the secondary battery production theme up 8.7 percent. Tokyo did not hold its gains. The Nikkei 225 was up 0.4 percent at the morning close before fading to end down 126.55 points at 65,142.78, a loss of 0.2 percent. Rising oil and caution ahead of U.S. inflation data offset the cable rally. SoftBank Group rose 3.9 percent to 6,810 yen and trading house Mitsubishi Corp. 2.3 percent to 5,038 yen. The won firmed against the dollar, quoted at 1,336.40 by Hana Bank at 3:37 p.m., 5.10 won stronger than the previous session. AJP Takeaways: - KOSPI closes above 7,000 for first time since July 23, rising 1.4 percent as cable, AI infrastructure, memory chip and battery shares rally. - Corning’s long-term fiber deal with Verizon sparks a Northeast Asia cable trade, lifting Furukawa Electric in Tokyo and Gaon Cable in Seoul on AI data-center demand hopes. - SK hynix leads the chip move while foreign investors sell, signaling selective HBM demand and leaving the durability of the rally tied to domestic buying, U.S. inflation data and oil prices. September 9, 2026 1 -
South Korea takes state-led route in AI race as latecomer SEOUL, September 09 (AJP) - America's biggest technology companies are preparing to pour roughly $725 billion into artificial intelligence infrastructure this year. South Korea cannot come close to matching that private-sector firepower. So Seoul is reaching for something Silicon Valley does not need nearly as much — the state balance sheet. The government's 2027 budget bill submitted to the National Assembly on Sept. 3 lifts spending on AI and three linked mega-projects by 97.2 percent to 21.3 trillion won ($15.8 billion), equivalent to about 2.6 percent of total government expenditure of 820.9 trillion won. Their share was about 1.5 percent this year. Gartner forecasts worldwide AI spending will reach $2.59 trillion in 2026, up 47 percent from a year earlier. The four biggest U.S. hyperscalers — Amazon, Microsoft, Google and Meta — alone plan around $725 billion in capital expenditure this year, up 77 percent from 2025, according to Value Add VC's tracker. Korea's wager is different. Private AI investment in the country came to a paltry $1.78 billion in 2025, compared with $285.9 billion in the United States, according to Stanford University's 2026 AI Index. Still, Korea ranked first globally in AI patents per 100,000 people, at 14.31, and third in notable AI models released. The mismatch points to the problem Seoul is trying to solve through state-led investment. Korea has technological capability, but the pools of private capital needed to scale it remain far smaller than in the United States. The treasury is moving to fill part of that gap. The 2027 money goes beyond R&D. It includes another 10,000 high-end graphics processing units, 3.1 trillion won for physical AI and roughly 2,000 domestically produced robots to be deployed in defense, policing, firefighting, care services and agriculture. Korea has reason to believe the factory floor could be its strongest AI battlefield. It already has the world's highest industrial robot density, with 1,220 robots for every 10,000 manufacturing workers, according to the International Federation of Robotics. Singapore is second at 818, while Germany and Japan have 449 and 446, respectively. If Korea cannot match the United States in software capital or China in industrial scale, Seoul is betting that it can compete where AI meets manufacturing. China illustrates the size of the challenge. It installed 295,000 industrial robots in 2024, accounting for 54 percent of all installations worldwide, and operates roughly 2 million robots, according to the IFR. South Korea is therefore trying to combine its semiconductor and automation strengths with a government-financed AI layer. AI colleges will expand from KAIST to all four national science and technology institutes, alongside new industry-linked graduate programs. The science ministry's budget rises 24.5 percent to a record 29.6 trillion won next year. Deputy Prime Minister and Science Minister Bae Kyung-hoon, who oversees 9.4 trillion won of the ministry's budget, has framed physical AI as an export strategy. Korea will "export the Republic of Korea's factories to the world" on a homegrown physical AI platform, he told a fiscal strategy meeting at the presidential compound in June. The budget push sits inside a much larger corporate investment drive unveiled by President Lee Jae Myung that month. Samsung Electronics, SK hynix and suppliers plan about 800 trillion won in new semiconductor investment, including fabrication plants in southwestern Korea, while SK Group, GS Group and Naver are backing an initial 550 trillion won buildout of AI data centers. Those sums are corporate investment rather than direct government expenditure. Seoul is seeking to accelerate them through infrastructure, policy support and public investment. "We must secure the core elements of AI faster than any other country," Lee said in announcing the three mega-project strategy. Nvidia is another part of the buildout. Chief Executive Jensen Huang said his company had agreed to supply 260,000 GPUs to the Korean government and four conglomerates, describing Korea as "the only government that has directly purchased AI chips for national R&D." The supply would push Korea's chip stock above 300,000 units from about 65,000 and feed new computing infrastructure, including a 2.41 trillion won national computing center in Haenam that broke ground in August. The model stands in sharp contrast to the United States. Washington's AI leadership has largely been financed by corporations and venture capital, with federal spending concentrated on research, procurement and strategic programs rather than attempting to replicate hyperscaler investment. Japan has taken a more interventionist approach, setting aside about 1.23 trillion yen ($8 billion) for advanced chips and AI this fiscal year, while India's five-year IndiaAI Mission totals 103.72 billion rupees ($1.09 billion). China offers the closer parallel, having long used government guidance funds and industrial policy to direct capital toward semiconductors, AI and other strategic technologies. Seoul is also extending its strategy beyond chips and robots. The Ministry of Land, Infrastructure and Transport on Wednesday presented a "K-AI City" strategy in Busan that would apply AI to building permits, municipal control rooms and other urban functions. Wonju, Cheonan-Asan, Saemangeum and Gwangju have been selected as pilot areas. Land Minister Kim Yun-duk said the program would be judged by whether it made everyday life safer rather than by the sophistication of the technology itself, promising "a people-centered AI city, where technology is not the goal itself." Money, however, may not remain Korea's biggest constraint. Electricity is emerging as another. The semiconductor factories and AI data centers planned across the country could require an additional 25 to 30 gigawatts of power, roughly equivalent to the output of 20 nuclear reactors, Reuters reported Tuesday, citing government estimates. Nuclear power currently supplies nearly a third of Korea's electricity. The initial AI data-center plan alone calls for about 8.4 GW of capacity, backed by SK, GS and Naver, with another 10 GW envisaged by 2035. Korea may therefore find that financing GPUs and factories is easier than supplying them with enough electricity. There is also a fiscal vulnerability built into Seoul's strategy. National tax revenue is forecast to jump 49.8 percent next year, with the semiconductor upcycle creating much of the fiscal room for the government's spending expansion. The global AI boom is generating extraordinary profits and tax receipts from Korea's memory-chip industry. Seoul is recycling part of that windfall into an attempt to build a broader domestic AI industry. A reversal in the memory cycle would weaken both sides of the equation at once. For now, the government is treating the race as one Korea cannot afford to sit out. Ha Jung-woo, standing vice chair of the Presidential Council on National AI Strategy since Aug. 31, described it Tuesday as "an all-out national contest that decides industry, security and growth." Unlike the United States, where companies are financing most of that contest, Korea is making the government one of its biggest early investors. AJP Takeaways - Korea nearly doubles 2027 spending on AI and three linked mega-projects to 21.3 trillion won. - Private AI investment remains a fraction of U.S. levels despite Korea's strength in patents and notable AI models. - Seoul is betting heavily on physical AI, building on the world's highest industrial robot density. - Electricity demand and reliance on the semiconductor upcycle pose longer-term risks to the state-led strategy. September 9, 2026 1 -
Mirae Asset Securities' Park Hee-chan: Time to Pause Aggressive Investments The stock market in September is showing mixed trends. The momentum that pushed indices toward 10,000 has long dissipated, with factors such as war, interest rates, and exchange rates contributing to increased volatility. In this chaotic environment, experts are offering various investment strategies.Park Hee-chan, head of the product support division at Mirae Asset Securities, provided a clear diagnosis: Now is the time to pause aggressive investments. He noted that while the domestic stock market has risen rapidly, driven by artificial intelligence (AI) and semiconductors, high interest rates and corporate investment burdens are likely to sustain volatility for the foreseeable future.In a recent interview, Park, who has over 20 years of experience in macroeconomics and asset allocation at Mirae Asset Securities, emphasized the need for a balanced investment strategy. Rather than focusing on specific themes, it is essential to invest in indices centered around the U.S. and appropriately divide investments between stocks and bonds, he said. He clarified, This does not mean avoiding stocks altogether; within stocks, preference should be given to indices over individual themes, mixing various strategies to reduce volatility.Korean Stock Markets High Dependence on Semiconductors and AIPark highlighted the high dependence on semiconductors in the domestic stock market. He pointed out that while the U.S. S&P 500 and Nasdaq are also influenced by the performance of AI and semiconductors, their volatility is significantly lower compared to the Korean market. The U.S. has a diverse industrial and corporate structure, whereas in Korea, large-cap semiconductor stocks like Samsung Electronics and SK Hynix have an overwhelmingly large impact on the index, he explained.He added, Even if sectors like cosmetics or biotech show positive trends, they cannot offset the volatility of Samsung Electronics and SK Hynix. Ultimately, the movements of large-cap semiconductor stocks are crucial for the Korean stock market.Demand for AI is not expected to decline immediately, with memory demand likely to continue beyond 2027. However, Park emphasized that what determines stock prices is not just the absolute level of demand but the growth rate.Concerns surrounding the AI industry are also reflected in companies funding methods. He noted that while big tech companies managed large-scale capital investments using their cash flows in 2023-2024, interest in funding has increased since the second half of last year, particularly following Oracles example. As big tech companies begin to raise funds for AI investments through bond issuance and borrowing, the market is starting to evaluate how quickly these investments can translate into profits, he explained.Park warned that by 2026, Googles free cash flow could turn negative, and by 2027, more companies may follow suit. In a high-interest environment with increasing borrowing, the profitability of AI investments will become critical. He anticipates that discussions about whether AI has peaked will intensify after next year.Sustainability of Earnings More Important Than ValuationPark believes that the current stock market valuation does not appear overly burdensome. Based on projected earnings for 2026-2027, the price-to-earnings ratio (PER) is not excessively high.The concern lies beyond that period. He stated, While the current valuation looks fine, the market is curious whether earnings can remain at this level in 2028 and 2029. He cautioned that it is not enough to feel secure just because valuations are low in the presence of actual earnings. Ultimately, the sustainability of future profits must be assessed.His preference for U.S. stocks in asset allocation stems from this reasoning. It is not merely about return expectations but also about the higher level of trust in the market. Park remarked, There is a belief that even if something goes wrong in the U.S. market, it will eventually recover. Therefore, it is advisable to focus long-term asset allocation around the U.S.Foreign Investors Likely to Rebalance at KOSPI 7000-8000Regarding foreign investment, Park does not expect significant net buying in the short term. As the domestic stock market has risen rapidly, the proportion of Korean stocks in global portfolios has increased, leading foreign investors to sell for rebalancing.He noted, Currently, at the KOSPI 6000-7000 level, foreign investors are in a balanced state, neither buying aggressively nor selling significantly. However, if the index rises to 7000-8000, the situation could change. He explained that as the proportion of Korean stocks increases again, foreign investors may sell to rebalance their portfolios.Park added, Since the Korean stock market has already risen significantly, it will be difficult for foreign investors to increase their holdings unless other countries also rise, causing the relative weight of Korean stocks to decrease. This implies that for foreign investment flows to change direction, the global stock market must rise in tandem with the domestic market.High Interest Rates Favor Short-Term Bonds Over Long-TermInterest rates are also a crucial variable in future investment strategies. Park cited the expansion of fiscal deficits by developed countries and increased global investment as reasons for rising global interest rates.He explained that AI-related capital investments are absorbing global liquidity. When big tech and related companies issue bonds for AI investments, more funds become tied up in the market for extended periods, which can burden the bond market.Consequently, not all sectors benefit from rising interest rates. In a high-interest environment, growth stocks must also prove the profitability of large-scale investments. Park emphasized, I do not foresee a major crisis like a financial meltdown occurring immediately, but now is not the time for aggressive investments.Among sectors, he expressed a relative preference for consumer goods, which have strong defensive characteristics. Companies that do not require explosive growth may be more stable in a high-interest and volatile environment. In bonds, he favored short-term bonds over long-term ones, as rising interest rates could increase price volatility for long-term bonds.ELS, Gold, and Brazilian Bonds as Diversification ToolsIn a volatile market, equity-linked securities (ELS) can also serve as an investment alternative. As volatility increases, the conditions for ELS, such as coupons, may improve. He noted, Recently, some ELS linked to Samsung Electronics and SK Hynix have formed conditions with high coupons and significant levels of price decline tolerance. However, he cautioned that ELS can also incur principal losses if the underlying asset prices fall significantly, so it is essential to examine the structure carefully, and the investment proportion should not be too large.Gold and Brazilian bonds were also suggested as alternatives. Park stated, While the potential for U.S. interest rate hikes may pose a concern, global central banks, especially those in emerging markets, continue to reduce their dollar asset holdings and increase gold purchases. He mentioned that Brazilian bonds offer high interest rates of around 15% with no taxes, but they are also considered high-risk products.He advised, A good strategy might be to maintain a 60-40 split between stocks and bonds or adjust to a 50-50 ratio depending on market conditions. In a volatile environment like this, it is necessary to adopt an approach that grows assets steadily, even if it means lowering expected returns. September 9, 2026 1
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Samsung deepens Galaxy Watch heart-health push SEOUL, September 09 (AJP) - The smartwatch is no longer merely a supplement to a smartphone. Samsung Electronics is pushing its latest Galaxy Watch deeper into preventive health care, seeking to turn a device once used mainly for checking messages and counting steps into an always-on health monitor capable of spotting changes before users themselves notice them. The effort also puts Samsung in a more direct contest with Apple, which has steadily transformed the Apple Watch into a health platform with electrocardiograms, irregular heart rhythm alerts, sleep apnea detection and, more recently, notifications for signs of chronic hypertension. Samsung on Wednesday held a press briefing in Seoul to highlight a suite of heart and health-monitoring functions built around its Galaxy Watch9 and Galaxy Watch Ultra2, unveiled in July. At the center of the latest upgrade is Heart Health Score, a Samsung Health feature that combines sleep, physical activity, body composition and vascular stress trends into a single assessment of factors affecting cardiovascular health. Rather than simply displaying individual measurements, the feature is designed to tell users how their everyday habits may be influencing their long-term heart health and provide personalized guidance on what they could change. Another new feature, Vitals, continuously looks for deviations from an individual's normal physiological patterns. After a user wears the Galaxy Watch during sleep for at least seven nights, it establishes a personal baseline using five biometric signals — heart rate, heart rate variability, respiratory rate, skin temperature and blood oxygen saturation. The watch can then flag measurements that move outside the user's normal range. The concept illustrates the direction in which the wearable industry is moving. The competition is increasingly less about how many physiological measurements a watch can collect and more about whether software can convert those measurements into information that a user can understand and act upon. Apple has been pursuing much the same approach. Its Vitals app, introduced with watchOS 11 in 2024, also establishes a user's typical overnight ranges and can issue a notification when multiple metrics fall outside them. Apple monitors heart rate, respiratory rate, wrist temperature, blood oxygen where available and sleep duration. Samsung's Vitals therefore represents less an entirely new category than an attempt to build a more comprehensive Samsung Health alternative around the same emerging idea of personalized baseline monitoring. Where Samsung is trying to put more distance between itself and Apple is in what it can measure — and how those measurements are combined. Galaxy Watch9's Heart Health Score incorporates factors including body composition, an area where Samsung has had a hardware advantage for several generations. Galaxy Watches equipped with bioelectrical impedance analysis, or BIA, can estimate body fat, skeletal muscle, body water, body mass index and other body-composition indicators directly from the wrist. The measurements are intended for general wellness rather than medical diagnosis. The information also feeds into Samsung's Fitness Index, which combines body composition, exercise records and other indicators to assess a user's fitness level and recommend goals. Blood pressure provides an even clearer point of distinction. Samsung's Galaxy Watch can estimate blood pressure after being calibrated against a conventional upper-arm cuff, with recalibration required every 28 days. The capability, previously limited by regulatory approval in some markets, became available to eligible U.S. Galaxy users in March this year. The Galaxy Watch9 goes a step further with a blood-pressure trend feature that can provide an estimate of morning blood pressure after users wear the calibrated watch overnight. Apple has taken a different route. Apple Watch Series 9 and later models and Apple Watch Ultra 2 and later can analyze cardiovascular patterns over a 30-day period and warn users when the data suggest possible chronic hypertension. The Apple feature does not provide a conventional systolic-and-diastolic blood-pressure reading. Users who receive a hypertension notification are instead advised to measure their blood pressure with a separate cuff for seven days and take the results to a medical professional. Apple introduced the hypertension notification feature in South Korea in January this year. The difference highlights two competing approaches to turning consumer electronics into health devices. Samsung is placing more measurement tools directly on the wrist, while Apple has often focused on detecting longer-term patterns that may warrant further medical examination. Neither approach turns a smartwatch into a doctor. Samsung and Apple repeatedly caution that their watches are not substitutes for professional diagnosis or treatment, an increasingly important distinction as consumer devices move closer to areas traditionally occupied by medical equipment. Choi Jong-min, vice president of Samsung Electronics' Digital Health Team, said continuous monitoring is one of the biggest advantages wearable devices can bring to preventive health care. Samsung has been developing heart-monitoring technology for its wearable devices for more than a decade. Its Gear 2 and Gear Fit, released in 2014, included optical photoplethysmography, or PPG, sensors for measuring heart rates. The company later added electrocardiogram measurement, blood-pressure monitoring and irregular heart rhythm notifications. Its irregular heart rhythm notification, designed to identify rhythms suggestive of atrial fibrillation, has received clearance from both South Korea's Ministry of Food and Drug Safety and the U.S. Food and Drug Administration. Sleep has become another area where the two companies have steadily converged. Samsung received the first FDA De Novo authorization for a smartwatch sleep apnea feature in 2024 and has upgraded the latest version to analyze breathing disruptions during sleep using artificial intelligence. Apple introduced its own sleep apnea notifications later in 2024. Its system uses the accelerometer to detect small wrist movements associated with breathing disturbances and evaluates the pattern over 30 days before alerting users to possible moderate-to-severe sleep apnea. Apple's sleep apnea notification became available in South Korea in September 2025, meaning both companies now compete over many of the same medically sensitive functions in Samsung's home market. For Samsung, however, the objective is increasingly to connect those individual functions into something closer to an early-warning system. The company cited cases in which alerts from Galaxy Watches prompted users to seek medical help. One user in Jordan received repeated irregular heart rhythm notifications and later sought medical attention, leading to the discovery of atrial fibrillation, according to Choi. Another user in Brazil recorded an electrocardiogram after noticing an abnormal heartbeat and shared the result with a doctor before receiving treatment. "The most important thing is that these people were able to detect the signs before reaching a critical moment and receive treatment in time," Choi said. Samsung is also trying to extend that monitoring beyond the person wearing the device. Samsung Health allows users to share information such as heart rate, stress, blood oxygen, sleep and body composition with family members, allowing relatives to follow changes remotely. Samsung said the capability could be particularly useful for families monitoring elderly parents who live alone or apart. Samsung views the Galaxy Ring and Galaxy Watch as complementary rather than competing form factors, with the lighter ring suited to continuous and overnight monitoring and the watch offering a display, exercise functions and broader interaction. When both are used, health information is brought together through Samsung Health. Users can also alternate between the devices while charging them, reducing gaps in monitoring, while Samsung says wearing both can extend the Ring's battery life by up to 30 percent by allowing the Watch to take over some overlapping measurements. When asked how Galaxy Watch differentiates itself from smart rings such as Oura Ring in markets including the United States, Choi said the two form factors serve somewhat different purposes. He characterized rings as more lifestyle-oriented devices, while watches offer broader functionality, particularly for sports and exercise, on top of health monitoring. The strategy gives Samsung something Apple does not yet have — a first-party ring feeding data into the same health ecosystem as its smartphone and watch. But Samsung still has considerable ground to defend in the smartwatch market. Apple, despite slipping behind Huawei globally in the second quarter, still accounted for 20 percent of worldwide smartwatch shipments and recorded the fastest year-on-year growth among the five largest brands, according to Counterpoint Research. The pressure is particularly visible in North America, an important premium market. Apple smartwatch shipments there rose 13 percent from a year earlier in the second quarter, while Samsung's fell 13 percent. AJP Takeaways - Samsung is expanding Galaxy Watch beyond fitness tracking with Heart Health Score and continuous monitoring features aimed at preventive health management. - The company's wearable health push builds on more than a decade of heart-monitoring technology, ranging from PPG sensors to ECG and irregular heart rhythm notifications. - Samsung sees Galaxy Watch and Galaxy Ring as complementary devices as it seeks to strengthen its health ecosystem and compete across different wearable form factors overseas. September 9, 2026 1 -
SK Hynix to Introduce ASML's Next-Generation EUV Equipment for DRAM Production by 2028 SK Hynix plans to implement ASMLs next-generation High NA extreme ultraviolet (EUV) lithography equipment in its DRAM production process by 2028. This move aims to enhance the performance and cost competitiveness of next-generation DRAM by surpassing the limitations of current fine process technologies.According to reports from Reuters and others on September 9, SK Hynix has set a goal to apply the High NA EUV process to DRAM mass production by 2028. The company is also considering participation in the Large Size Mask Consortium led by TSMC.High NA EUV represents a new lithography technology capable of creating finer circuits than existing EUV equipment. The numerical aperture (NA), which indicates the light-gathering ability, will increase from 0.33 in current EUV systems to 0.55. This advancement allows for the formation of finer patterns in a single step, reducing the number of process stages while improving semiconductor performance and productivity.Since first applying EUV technology to the mass production of 10-nanometer class fourth-generation (1a) DRAM in 2021, SK Hynix has been expanding its use in advanced DRAM applications. The introduction of High NA EUV is expected to simplify existing EUV processes and accelerate the development of next-generation memory.SK Hynix is also joining efforts to change the standards for semiconductor lithography processes. The company is reviewing participation in a consortium aimed at scaling up photomasks from the current 6-inch size to 12 inches. Photomasks are essential for transferring semiconductor circuit patterns onto wafers, and increasing their size can enhance the productivity and efficiency of next-generation lithography processes.The consortium includes global semiconductor companies such as ASML, with Samsung Electronics already involved. If SK Hynix joins, it could intensify the competition over technological standards in the global semiconductor industry regarding next-generation EUV equipment and large photomasks.* This article has been translated by AI. September 9, 2026 1
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Samsung and SK Hynix Strengthen Global Semiconductor Alliances to Maintain Memory Leadership Samsung Electronics and SK Hynix are enhancing their collaboration with global semiconductor companies to maintain their leadership in next-generation memory technology. They are not just securing the latest equipment but are actively participating in technology development and standard-setting. This shift indicates that the competition to maintain a memory advantage is expanding from individual manufacturing capabilities to the entire global semiconductor ecosystem. Samsung has joined a large mask consortium led by ASML to expand the existing 6-inch photomask, which is used to engrave circuit patterns on wafers, to 12 inches. At the same time, it is pursuing the application of high-NA EUV technology for advanced DRAM mass production by 2028, becoming the first in the industry to do so. SK Hynix is also aiming to apply high-NA EUV for DRAM mass production in 2028 and is considering joining the 12-inch mask consortium. High-NA EUV is a next-generation lithography technology that can create finer circuits than existing EUV. Combining this with large masks can enhance productivity and reduce manufacturing costs. ASML and TSMC plan to establish a pilot production line for 12-inch masks by 2031 and prepare for full-scale production by 2033. Samsung and SK Hynixs early participation in this process signifies more than just equipment acquisition; it indicates their intention to play a leading role in shaping the standards and specifications for semiconductor manufacturing in the future. It is clear that South Koreas semiconductor industry possesses world-class manufacturing competitiveness. The accumulated process technology and mass production experience in memory fields such as DRAM and HBM are difficult to replicate. However, given Chinas rapid advancements, complacency is not an option. Chinese memory companies like CXMT and YMTC are quickly enhancing their production capacity and technological capabilities, backed by substantial government support. While a technological gap still exists between South Korea and China, the latters ability to build competitiveness based on its vast domestic market is a cause for concern. Moreover, the nature of semiconductor competition is changing. In the AI era, simply producing high-quality memory is no longer sufficient to maintain competitiveness. Advanced lithography equipment, materials and components, design, foundry, advanced packaging, and software must be interconnected within a single ecosystem. Collaboration with big tech companies developing AI semiconductors is now essential rather than optional. In the future, companies must go beyond merely supplying HBM and next-generation memory demanded by big tech; they need to collaborate from the early stages of product development, jointly designing new memory and packaging technologies. They must evolve from a customer-supplier relationship to become partners in technology development. The government must also actively support our companies to position themselves at the center of global cooperation networks through research and development and talent cultivation. It is urgent to streamline regulations to ensure domestic investments do not lag. While the government cannot create competitiveness for companies, it is responsible for creating an environment where they can compete. The memory advantage is not an eternal right. Technology changes rapidly, and competitors are constantly emerging. The methods for maintaining this advantage must also evolve. Samsung and SK Hynix must maintain their world-leading manufacturing competitiveness while closely connecting with global leaders like ASML, TSMC, and big tech to shape the direction of technology together. Companies that collaborate to define technological pathways will outlast those that try to lead alone. September 9, 2026 1
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Samsung partners with Mistral AI to develop semiconductor-specific AI SEOUL, September 09 (AJP) - Samsung Electronics has formed a strategic partnership with French artificial intelligence startup Mistral AI to jointly develop AI models tailored to semiconductor design and manufacturing, according to the company on Wednesday. The partnership, reached around the time of a South Korea-France summit, will combine Samsung's semiconductor technology and manufacturing data with Mistral AI's AI models to improve productivity and precision across chip operations. Samsung plans to use Mistral AI's large language models, including Mistral Large, to develop proprietary AI models optimized for data generated by its Device Solutions division, which oversees the company's semiconductor business. The models will be gradually deployed for tasks including data analysis, defect prediction and process optimization, with Samsung aiming to shorten development cycles while improving manufacturing efficiency and product quality. The two companies will also jointly develop an AI platform and operating system optimized for semiconductor operations. Samsung said the AI models will operate on its own infrastructure through an on-premises system, allowing sensitive semiconductor data to be processed without being transferred to external cloud infrastructure. The partnership is expected to expand across Samsung's memory, foundry and logic businesses, with plans to eventually connect customers and partners to a broader AI-based semiconductor ecosystem. "As the complexity of semiconductor design and manufacturing increases rapidly, the ability to securely and precisely utilize vast amounts of data is emerging as a key competitive advantage," said Jun Young-hyun, head of Samsung Electronics' Device Solutions division. "Together with Mistral AI, we will build AI models and platforms specialized for the semiconductor industry and set a new standard for AI-driven semiconductor innovation," Jun said. Samsung has also made a large-scale equity investment in Mistral AI to strengthen the strategic partnership and establish a foundation for long-term technology cooperation and joint business projects. The company did not disclose the size of the investment. AJP Takeaways - Samsung and Mistral AI will jointly develop proprietary AI models specialized for semiconductor design and manufacturing. - The models will be deployed for data analysis, defect prediction and process optimization while operating on Samsung's internal infrastructure to protect sensitive chip data. - Samsung has also invested in Mistral AI as the companies seek to expand their partnership across memory, foundry and logic businesses. September 9, 2026 1 -
Korean Inc. bottom and top lines at 11-year high Q2 on chip boom SEOUL, September 09 (AJP) - Sales at South Korea's externally audited companies grew at their fastest pace since 2015 in the second quarter as a semiconductor boom bolstered both top and bottom lines of manufacturers. Sales rose 26.7 percent from a year earlier in the April-June period, accelerating from 13.5 percent growth in the first quarter, according to data released Wednesday by the Bank of Korea (BOK). The reading was the highest since the first quarter of 2015. Externally audited companies are firms that meet statutory thresholds, including asset-size requirements, and are required under South Korean law to undergo an external audit. The BOK estimated the figures from a sample of 4,260 companies out of 26,509 eligible firms as of the end of 2025. Manufacturers led the acceleration, with sales growth jumping to 39.6 percent from 21.1 percent in the previous quarter. Sales in the machinery and electrical and electronics sector rose 88.5 percent from a year earlier, compared with 52.1 percent growth in the first quarter. The increase was heavily concentrated in electronic, video and communications equipment, a category that includes semiconductors. Sales in the sector surged 119.7 percent from a year earlier, up from 75.7 percent growth in the previous quarter. Excluding the sector, manufacturing sales growth would have been 14.0 percent instead of 39.6 percent, the BOK said. Sales growth among non-manufacturers also rose 9.7 percent from 3.7 percent. Transportation sales rose 13.6 percent, up from 8.1 percent, as the Middle East war pushed up tanker and bulk-shipping rates and increased demand for air cargo. Wholesale and retail sales growth accelerated to 13.7 percent from 7.1 percent, helped by stronger business at semiconductor distributors and department stores. Construction sales rose 0.3 percent from a year earlier, returning to growth for the first time in eight quarters as work on semiconductor plants increased. Total assets increased 6.8 percent from the end of the previous quarter, compared with a 0.2 percent increase in the same period a year earlier. Profitability improved even more sharply. The operating profit-to-sales ratio rose to 16.9 percent from 5.1 percent a year earlier. The pretax profit-to-sales ratio climbed to 23.1 percent from 5.3 percent. Both were the highest readings since the first quarter of 2015. Manufacturers' operating margin surged to 24.0 percent from 5.1 percent a year earlier. The machinery and electrical and electronics sector posted an operating margin of 43.0 percent, up from 7.4 percent. The BOK said profits rose faster than sales because chipmakers have a high share of fixed costs, magnifying the impact of stronger revenue on earnings. The petroleum and chemical sector also benefited from wider refining margins amid the Middle East war, lifting its operating margin to 9.5 percent from 2.5 percent. Profitability outside manufacturing was weaker, with the operating margin for non-manufacturers edging down to 5.0 percent from 5.1 percent a year earlier. The transportation sector's operating margin fell to 4.8 percent from 7.0 percent as higher oil prices and longer alternative routes raised costs despite stronger sales. The improvement was also much stronger among large companies. Sales growth at large firms accelerated to 30.5 percent from 16.0 percent in the first quarter. Growth at small and midsized companies rose to 10.2 percent from 2.4 percent. Large companies' operating margin jumped to 19.1 percent from 5.1 percent a year earlier. The margin for small and midsized firms edged up to 5.3 percent from 5.0 percent. Corporate balance sheets improved overall. The debt-to-equity ratio fell to 84.5 percent from 87.0 percent in the first quarter. Borrowings and corporate bonds as a share of total assets declined to 22.8 percent from 23.9 percent. Smaller firms moved in the opposite direction. Their debt-to-equity ratio rose to 112.1 percent from 103.0 percent. Borrowings and corporate bonds as a share of assets increased to 31.1 percent from 30.7 percent. AJP Takeaways - Bank of Korea data showed corporate sales growth reached its strongest pace since 2015 as the semiconductor boom lifted manufacturing revenue and profits. - South Korean manufacturers accounted for much of the improvement, with gains heavily concentrated in electronic, video and communications equipment. - Middle East disruptions boosted transportation sales, while higher oil prices and longer alternative routes weighed on the sector's profitability. September 9, 2026 1