News about South Korea

SK hynix has launched a 2 trillion won ($1.5 billion) financing program with major commercial banks and a state-run trade insurer to help domestic chip suppliers secure cheaper funding. Under the deal, SK hynix and the participating banks will contribute 100 billion won, while the Korea Trade Insurance Corporation will provide guarantees worth up to 20 times that amount, supporting as much as 2 trillion won in financing. The initiative targets small and midsized suppliers of semiconductor materials, parts and equipment, who face high borrowing costs. The company is also building the Trinity Fab, an 870 billion won testing facility at the Yongin cluster where suppliers can validate products under real manufacturing conditions.

South Korean finance officials are reportedly set to meet major crypto exchanges, including Upbit, Bithumb, Coinone, DigitalX and Gopax, on Tuesday, days after a lawmaker introduced a bill that could delay the crypto tax by two years. The tax has already been postponed three times and is currently scheduled to start in January 2027. An exchange official said unresolved transaction standards and limited time to prepare infrastructure support a delay. Democratic Party lawmaker Park Min-gyu's bill would push the start date to January 1 of the second year after Korea begins sharing data under the OECD's Crypto-Asset Reporting Framework; with the first data exchange expected in 2027, taxation would begin in 2029.

The won strengthened against the US dollar as export-driven supply of dollars grew, with exporters selling USD, supported by a semiconductor boom. The BoK's average won/USD rate for the first 12 trading days of October 2026 was 1,342.6, the lowest since September 2024, compared with 1,528 in June 2026. Average daily trade surplus in September 2026 was nearly $2.5 billion, far exceeding net foreign stock selling. The BoK raised its base rate to 3% in July and August 2026, and the IMF lifted its 2026 growth forecast for South Korea to 3.3%. Analysts expect the won to trade around 1,300 per dollar by year-end, but warn volatility may persist due to Middle East risks, oil prices and foreign capital outflows from the stock market.

Finance Minister Lee Hyoung-il said South Korea's growth is projected at around 3% this year, supported by solid chip exports and higher facility investment, with momentum expected to strengthen over the medium to long term. On the sidelines of the IMF and World Bank Group meetings in Bangkok, he briefed Moody's, Fitch and S&P Global Ratings on government-led growth initiatives, including three megaprojects, the green transition and the Future Fund launching next year. The rating agencies were keen to know how the government will use strong tax revenues from the chip supercycle, and noted stable economic indicators and sound public finances despite population aging and the war in the Middle East. Lee also signed memorandums of understanding with multilateral development banks, including EBRD and CABEI, to enhance cooperation on AI.

Global hedge funds suffered steep losses last week as a sharp unwind of AI bets hit, with Asia-focused funds hardest hit. Goldman Sachs said global fundamental long-short funds, or stock pickers, lost money every day last week, losing 2.9% for the week to October 15, though they remain up 14.3% year to date. South Korea's semiconductor-heavy market bore the brunt, as the Kospi tumbled 8% on Thursday to a six-month low, while CoreWeave's bonds sold off, pushing yields above 15%. Analysts said the selloff reflected a crowded trade meeting hotter-than-expected US inflation data, which revived expectations of rate hikes, rather than a fundamental rejection of AI. Goldman also noted that Asia-focused stock pickers have erased more than half of their gains since their late-June peak.

Samsung is reportedly preparing to exit its home appliances business in China, the latest step in a multi-year retreat that began with closing its smartphone production in 2019, followed by TVs and PCs. The article attributes this to domestic Chinese brands such as Haier, TCL, Hisense and Xiaomi offering products that are cheaper and higher quality, backed by vertically integrated supply chains and fast product cycles. It argues that European and Korean brands will have to accept thinner margins or retreat to the premium segment. The article also predicts the mass market will be dominated by low-cost Chinese devices, which would benefit consumers worldwide.