Britain's Financial Times (FT) reported on the 8th that, boosted by the global race for artificial intelligence (AI) supremacy and a wave of rearmament, Korea has emerged as a winner in the world economy.
FT reported that as Korea's semiconductor, shipbuilding, and defense companies benefited, gross domestic product (GDP) in the first quarter rose 3.6% from the same period a year earlier.
Citing Michael Breen, CEO of Insight Communications, FT said that despite high dependence on energy imports, the cost of living, and youth unemployment, the growth engine is running actively.
It added that, due to the AI supremacy race, memory chip sales hit a record high in April, and demand for ultra-high-voltage transformers also surged on growing data center needs.
As a result, Samsung Electronics and SK hynix made the list of the world's top 20 conglomerates, and shares of Hyosung Heavy Industries, HD Hyundai Electric, and LS Electric rose sharply, it reported.
It also said that in shipbuilding, as the contest narrowed to Korea versus China, the United States and its allies are turning to Korea, leading to a string of orders.
FT projected that Korea's three major shipbuilders—HD Korea Shipbuilding & Offshore Engineering, Samsung Heavy Industries, and Hanwha Ocean—won $19.1 billion in contracts through last month this year and are set to surpass last year's record of $36.3 billion.
FT reported that Korea is also enjoying a boom in defense as security concerns have grown in Europe, Asia, and the Middle East since the start of the war between Russia and Ukraine.
Buoyed by the popularity of K-pop and K-dramas, the number of tourists is increasing, and the cosmetics industry ranks second in export volume after France, it said.
However, it analyzed that the steel and petrochemical industries are struggling with price competition from China and high oil prices, and small and midsize companies are facing difficulties due to wage burdens and energy expense.
It also assessed that China's transformation from a low-cost manufacturing base into a high-tech powerhouse could pose an existential threat to Korea, which is losing competitiveness in machinery, batteries, displays, and automobiles.
Kim Young-han, a professor of economics at Sungkyunkwan University, told FT, "Industries that fail to maintain a technological edge over China will soon be forced out of the market," adding, "Korea is trending toward a comparative disadvantage in nearly all sectors except semiconductors."