Among Korea's industrial sectors, semiconductors and displays are expected to boom as artificial intelligence (AI) infrastructure spreads, according to a survey. In contrast, steel, petrochemicals, and machinery, which are suffering from a supply glut from China, are projected to face difficulties again next year.
On the 14th, the Korea Chamber of Commerce and Industry's analysis with 11 major industry associations of a recent survey, "2026 industry weather outlook," showed semiconductors and displays as "clear," batteries, biotech, automobiles, shipbuilding, and textile-fashion as "mostly clear," and machinery, petrochemicals, steel, and construction as "cloudy."
KORCHAM also said that with next year being the Year of the Red Horse, industries that will benefit from AI—semiconductors (DRAM), energy storage systems (ESS), and displays (Display), the "R.E.D" sectors—are expected to grow.
In semiconductors, exports this year are set to grow 16.3% to $165 billion, and next year's exports are expected to rise 9.1% to $180 billion. As global big tech corporations compete to build AI infrastructure, demand is expected to expand for high-value DRAM such as high bandwidth memory (HBM).
The display industry outlook is also bright. As AI spreads and device specifications rise across the board, demand has increased for organic light-emitting diode (OLED) panels, which are highly power efficient. Next year's exports are projected at $17.67 billion, up 3.9% from this year. The Korea Display Industry Association expects next year's global OLED shipments for in-vehicle displays and for the Extended Reality (XR) market to increase by 83.3% and 238.5%, respectively, thanks to larger car displays and expansion of XR.
The battery industry is also "mostly clear." With AI data centers consuming more power, ESS demand is rising, and next year's exports are expected to increase 2.9% from this year. In electric vehicles, new "K-battery equipped models" from Hyundai Motor, Kia, and BMW are concentrated for release next year, suggesting a rebound in demand for EV batteries. However, reduced benefits from the U.S. advanced manufacturing production credit (AMPC) and rising market share of Chinese products are risk factors.
Automobiles, shipbuilding, biotech, and textile-fashion are also expected to be "mostly clear." In autos, with domestic EV greenfield plants coming online and tariff easing for the U.S. market, next year's production is expected to rise 1.2% from this year to 4.13 million units. Exports are forecast to increase 1.1% to 2.75 million units. The rising global share of Chinese-brand cars is a threat.
In shipbuilding, supported by demand for liquefied natural gas (LNG) carriers and container ships, next year's exports are expected to grow 8.6% from this year to $33.92 billion. With the trend of replacing fleets with eco-friendly vessels, next year's container ship orders are projected at 375 ships, suggesting steady demand. LNG carriers are also expected to see up to 100 additional orders due to project demand from increased U.S. LNG exports and Qatar's fleet replacement needs. However, the delay in International Maritime Organization (IMO) greenhouse gas reduction measures is a negative, increasing uncertainty over demand for eco-friendly vessel conversions.
Machinery, petrochemicals, steel, and construction are forecast to be cloudy as domestic and external uncertainties grow. In petrochemicals, exports are expected to decline about 6.1% from this year due to a supply glut from China and falling prices of petrochemical materials and supplies such as naphtha amid low oil prices. However, supply glut is expected to ease somewhat with a shift to recovery in operating rates from business restructuring and global petrochemical plant closures.
Steel is also "cloudy" due to a supply glut from China and stronger import restrictions in the United States and the European Union (EU). The Korea Iron & Steel Association said, "While exports have recently increased, mainly to emerging economies such as Latin America, shipments to traditional destinations are decreasing due to U.S. trade protection measures and the EU's steel import restriction (TRQ)."
In machinery, rising external uncertainty—such as broad tariff measures by the U.S. administration of Donald Trump—is expected to push next year's exports down 3.7% from this year. In construction, persistently high interest rates are worsening project viability, while tighter screening of project financing (PF) loans and stricter safety and labor regulations are expected to delay work and raise expense, limiting the increase in private-sector orders.
Lee Jong-myeong, head of the Industrial Innovation Division at KORCHAM, said, "Chinese manufacturing competitiveness will rise by the day," and noted, "Government regulatory reform and incentives are important so that corporations can continue aggressive experiments centered on AI."