Samsung Electronics and SK Hynix are expected to invest a combined $541.03 billion USD (KRW 800 trillion) in new semiconductor capacity in southwestern South Korea. Samsung has selected Gwangju as a candidate location for a new production base, while SK Hynix is also considering an additional site in the region. A separate advanced semiconductor packaging cluster, involving approximately $54.78 billion USD (KRW 81 trillion) in investment, is planned for the Chungcheong region.

South Korean companies, including SK Group, GS Group and Naver, are also planning major investments in AI data centers. Initial projects are expected to total around $371.96 billion USD (KRW 550 trillion) and provide 8.4 GW of capacity. Construction is scheduled to begin by the first half of 2028, and cumulative investment could exceed $676.28 billion USD (KRW 1,000 trillion) by around 2035.

The physical AI program aims to make South Korea a leading producer of industrial and humanoid robots by 2030. The government plans to support the development of robots for ten major industries, with initial commercial applications targeted for 2028. The program also includes industrial data collection facilities, a domestic physical AI foundation model and training programs for engineers and researchers.

A robotics and component manufacturing cluster is planned for the Saemangeum area on the west coast. The government intends to combine robot production, component supply, AI development and industrial testing within the same regional base.

Source: Reuters

PSR Analysis: The plan is notable because South Korea is not treating AI as a software or semiconductor issue alone. It combines chip production, data centers, power and cooling infrastructure, robotics, component manufacturing and workforce development. The objective is to turn rising demand for AI computing into a broader cycle of domestic manufacturing investment.

The scale of the program will create substantial demand for industrial equipment before physical AI has a major direct effect on machinery markets. Semiconductor plants and data centers require construction equipment, standby and distributed power systems, cooling equipment, material-handling systems, uninterruptible power supplies and electrical control equipment. These investments are likely to generate measurable equipment demand earlier than the planned deployment of humanoid robots.

The decision to place new facilities outside the main semiconductor centers also reflects capacity constraints in existing industrial areas. Large semiconductor and data center projects require reliable electricity, water, logistics infrastructure and skilled labor, as well as access to equipment and material suppliers. Building an equivalent industrial base in new regions will take time, even with strong government support.

The physical AI component is more uncertain. Developing robot platforms and AI models is only one part of commercialization. Industrial users will also require reliable hardware, application-specific engineering, safety systems, maintenance networks and evidence that the equipment can reduce operating costs. Early adoption is therefore more likely in structured manufacturing and logistics environments than in applications requiring highly flexible human-like operation.

The main near-term impact of the strategy will come from the construction of semiconductors and data center capacity. Physical AI may become more important over the longer term, but its development will depend on whether South Korea can connect its strength in semiconductors and electronics with competitive robot hardware, components and practical industrial applications. PSR

Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research

The article explains that demand for LNG carriers and high-value vessels remains strong. It also states that demand for low-carbon, high-efficiency ships is growing due to stricter environmental regulations.

The report emphasizes that South Korean shipbuilders have a strong presence in the high-value-added vessel market. While Chinese companies have the upper hand in terms of volume, the analysis suggests that South Korean firms remain dominant in cutting-edge sectors such as LNG carriers.

The increase in orders is due in part to the expansion of Middle Eastern energy projects and the recovery of the shipping market. It also notes that expectations for improved profitability in the shipbuilding industry are rising.

Source: Seoul Economic Daily

PSR Analysis: The recent surge in large vessel orders for Korean shipbuilders suggests that the industry is entering a new phase in which technological complexity is more important than production scale.

While China continues to dominate global shipbuilding volume, Korean shipyards remain highly competitive in building LNG carriers and other technically demanding vessels. This distinction is becoming increasingly important as environmental regulations tighten, and shipowners prioritize fuel flexibility, efficiency, and long-term compliance.

What is often overlooked is the broader industrial impact of this trend. LNG carriers and advanced vessels generate high demand for high-value subsystems, including marine engines, generators, power electronics, cryogenic equipment, and automation systems. Consequently, the current shipbuilding cycle could have a greater multiplier effect on industrial supply chains than previous commodity-driven shipping booms.

Another significant shift is the growing connection between Middle Eastern energy investments and Northeast Asian industrial manufacturing. LNG infrastructure expansion is not just an energy issue anymore; it is also supporting sustained demand for Korean heavy industry exports.

The competitive landscape may evolve differently than in previous cycles. While Chinese shipbuilders are rapidly improving their technical capabilities, Korean companies are moving further upstream toward integrated, engineering-intensive solutions rather than competing purely on vessel output.

This suggests that future competition may focus less on shipyard capacity and more on controlling advanced marine systems, propulsion integration, emissions technology, and lifecycle service capabilities. PSR

Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research

In response to the growing adoption of electric construction equipment, HD Construction Equipment has introduced South Korea’s first safety management certification system for high-voltage systems. The system is designed to educate specialists in maintaining and inspecting high-voltage batteries and electrical systems in electric excavators and other machinery.

Recognizing that the expansion of electric construction equipment requires addressing safety risks that differ from those of conventional diesel machines, the company has developed educational programs and a certification system. Certified individuals receive specialized training in handling high-voltage equipment, troubleshooting, and maintenance operations.

The company positions this initiative as part of the infrastructure development required for the expansion of the electric construction equipment market. HD Construction Equipment plans to continue fostering relevant talent and strengthening its service infrastructure.

Source: HD Construction Equipment

PSR Analysis: I think this initiative shows that South Korean construction equipment manufacturers are starting to see electrification as more than just product development. They view it as an “operation-oriented industrial infrastructure” that includes service systems and workforce development.

Electric construction machinery requires high-voltage batteries and electrical systems, so it demands different maintenance skills than conventional diesel machines. Against this backdrop, manufacturers’ move to establish a certification system reflects their intention to establish electrification in the market as a total solution that includes operation and maintenance, not as a standalone product.

In this regard, South Korean manufacturers’ approach appears to differ from that of their European and American counterparts. In Europe and the United States, service systems based on existing dealer networks are well-established, and efforts regarding electric construction machinery proceed as an extension of these frameworks.

In contrast, Korean manufacturers are proactively establishing certification systems and training programs to address the new risks associated with electrification. This proactive approach effectively mitigates operational uncertainties during the initial stages of electrification, potentially providing a competitive advantage, especially in regions with underdeveloped service infrastructure. PSR

Akihiro Komuro is Research Analyst, Far East and Southeast Asia, at Power Systems Research

The tests were completed in January 2026 on the X52DF-A-1.0 engine at the Engine & Machinery Division of HD Hyundai Heavy Industries (HHI-EMD) in South Korea, witnessed by Lloyd’s Register together with representatives from major classification societies and under the supervision of EXMAR.

The 52-bore engine is scheduled to be installed on a 46,000 m3 LPG/ammonia carrier ordered for EXMAR. According to WinGD, the vessel series is expected to become the first ammonia-fueled gas carriers to enter commercial service, representing an important step in the shipping industry’s decarbonization efforts. The company said the development program demonstrated strong safety, reliability and performance results under a fuel pathway widely viewed as one of the more promising zero-carbon options for long-distance marine transport.

WinGD said the X-DF-A engine uses high-pressure ammonia injection with a pilot fuel dose of around 5% at full load, while delivering load handling, dynamic response and fuel efficiency comparable to equivalent diesel-fueled X-Engines in both ammonia and diesel modes. The company also said emissions results were encouraging, including NOx levels during ammonia operation that were below those generated in diesel use, alongside negligible contribution of N2O to the overall greenhouse gas emissions footprint. WinGD added that it has already secured an early orderbook of around 30 X-DF-A engines across multiple vessel segments.

Source: WinGD

Many alternative-fuel projects still sit at the concept or pilot stage. This one is different because it was executed on an engine destined for an actual commercial vessel program, under classification-society supervision and in cooperation with a yard ecosystem that can industrialize the result.

PSR Analysis: The real significance of this announcement is not the “world first” label by itself, but the fact that Korea is positioning itself around the most commercially critical bottlenecks in ammonia propulsion: engine manufacturing, class-approved testing and shipyard integration.

That matters because the next competitive phase in marine decarbonization will not be decided by who publishes the boldest fuel vision, but by who can make shipowners, charterers, insurers and financiers comfortable that the machinery can be ordered, classed, built and operated without introducing unacceptable technical risk.

The deeper industry implication is that ammonia is becoming less a pure fuel debate and more a capability race across the maritime supply chain. Korean players benefit because their strength is not limited to shipbuilding volume; they can connect engine builder, yard, equipment supplier and regulatory interface inside one coordinated industrial base.

Even so, this does not mean ammonia has already “won.” Toxicity, crew handling, pilot fuel dependence, fuel availability and bunkering economics remain major barriers, and these issues may slow adoption outside cargoes and routes where ammonia logic is especially strong. What Korea is really buying through early testing is optionality and credibility.

If ammonia scales, Korean yards are ahead. If it does not scale as quickly as hoped, they still gain by proving they can validate and industrialize whichever future-fuel platform the market ultimately rewards. That is a more durable competitive advantage than simply being first to announce a new engine. PSR

Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research

South Korea’s Ministry of Agriculture, Food and Rural Affairs 2026 research and development investment plan for the agricultural sector reveals a policy to allocate budget resources primarily to the “smart agriculture” field, centered on robots, drones, and artificial intelligence (AI).

The plan aims to address structural challenges in Korean agriculture, such as an aging population and severe labor shortages, while achieving increased productivity and labor savings.

A key feature of the plan is its emphasis on developing field-implementable technologies, such as autonomous agricultural machinery, data analysis for precision farming, and unmanned pest control drones. The plan also envisions advancing the sophistication of agricultural management through the development of standalone technologies, and by establishing data integration platforms and agricultural ecosystems.

These platforms are expected to promote collaboration with agricultural machinery manufacturers, ICT companies, and startups. The government also plans to commercialize research outcomes and expand exports to enhance domestic agricultural competitiveness and create new industries. This R&D enhancement is not merely a subsidy policy but part of a long-term strategy to transform agriculture into a data-driven industry.

Source: AgTechNavigator      Read The Article

PSR Analysis: This is a short-term demand stimulus measure through subsidies, but it seems to be aimed at shifting the competitive axis for agricultural machinery from “machine performance” to “data and autonomous control” in the medium to long term.

In the Korean market, Japanese brands like Kubota and Yanmar have technological, reliability, and patent advantages, so a rapid reversal in mechanical core technology is unrealistic. However, a comeback is possible even as a latecomer in software domains such as AI control, autonomous driving, and agricultural data infrastructure.

If the government spearheads the development of smart agricultural infrastructure, domestic manufacturers could differentiate themselves with an integrated “hardware + data” model. Nevertheless, since farmers prioritize durability and asset value, a significant short-term erosion of Japanese brands’ market share is unlikely.

A more realistic scenario is that Korean manufacturers will advance their capabilities while Japanese brands localize and adapt their smart functions. Consequently, the market will likely evolve toward intensified competition in added value rather than experience sudden shifts in market share. PSR

Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research

The program’s key points include:

• A national initiative aiming to popularize 20,000 electric motorcycles in 2025

• The national subsidy is US$ 10.86 million  (16 billion won), which significantly reduces the purchase price when combined with local government subsidies

• Particularly favors battery swap systems (BSS), subsidizing up to 70% of the vehicle price (previously 60%)

• Plans to establish 500 new battery swap stations to develop swap infrastructure

• A separate US$ 3.4 million (5 billion won) will be invested in swap station development

• Subsidies are limited to batteries and stations that comply with national standards (KS specifications)

• A policy mechanism will promote standardization to prevent fragmented specifications among manufacturers

• Additional subsidies will be provided for high-performance models with fast-charging capability (3 kW or higher) and battery condition monitoring

The primary target for adoption is commercial two-wheelers for delivery riders to solve charging wait times through the swap system

The objectives are to reduce noise and exhaust emissions, improve the urban environment, and accelerate the integration of electric motorcycle (EV) infrastructure

Battery-swap electric motorcycles: 1,654 units in 2023, doubling to 3,429 units in 2024. As of 2024, there are 1,872 swap stations nationwide. The plan is to add another 500 stations.

Source: Seoul Shinmum

PSR Analysis: This initiative is more than just a policy to distribute 20,000 electric motorcycles. Rather, it is a comprehensive package that encompasses infrastructure, standards, and demand creation.

The goal is to rapidly establish a “battery-swap EV motorcycle + standardized battery-swap station network” across South Korea. This system aims to advance the electrification of delivery bikes, eliminate charging wait times, standardize fragmented specifications through national regulation, and promote high-performance electric motorcycles. The strategy seeks to drive low-quality, low-cost vehicles out of the market. If sustained, the system will likely create a structure in which those controlling the battery pack, swap station, and subscription model will profit more than manufacturers selling vehicles alone.   PSR

Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research

The subsidy program enables companies to introduce electric forklifts at a low cost, putting pressure on them to replace their diesel models with electric ones. The adoption of ‘unmanned forklifts’ and ‘remote/automated transport’ within companies is also progressing, with the smart transformation of logistics and factories stimulating market demand.

Consequently, the combination of safety standards, electrification and automation is establishing itself as the ‘standard direction for next-generation forklifts’ in South Korea.

Source: 엔세이프

PSR Analysis: The most distinctive feature of the Korean market is the government’s aggressive promotion of safety standards to near-mandatory levels, coupled with the rapid rate at which these standards are adopted as market norms. Furthermore, against a backdrop of labor shortages, an ageing population and frequent overloading accidents, companies are highly incentivized to invest in safety equipment and automation.

Korea’s unique strengths lie in its extensive IT infrastructure and smart factory adoption, as well as its advanced communication environments, making the transition from electrification to automation technically feasible. The concentration of major manufacturers in the automotive and electronics industries, coupled with high rates of 24-hour operation and indoor work, creates an ideal environment for electric forklifts, accelerating their adoption even further.

Conversely, weaknesses include the significant cost burden for SMEs (Small and Medium-sized Enterprises) and the limited diversity of manufacturers’ lineups, which is slower than in Europe, leading to slower adoption of electric motors in high-durability and large-capacity segments.

While safety requirements are clearly defined for overseas manufacturers, this also creates an ‘entry barrier’ where low-cost models that do not meet safety and IT equipment standards find it difficult to enter the market. Over the next two to three years, the progression from electrification to telematics standardization to partial automation (remote/unmanned) is expected to become more pronounced. PSR

Akihiro Komuro is Research Analyst, Far East and Southeast Asia

The U.S. Department of Commerce has announced tariffs of up to 50% on 407 steel and aluminum derivative products from South Korea.

The department’s Bureau of Industry and Security said this measure would apply to hundreds of products, including wind turbines and their components, mobile cranes, bulldozers, railway vehicles, furniture, compressors and pumps.

The Korea International Trade Association (KITA) has analyzed the tariff targets, which include refrigerators, freezers, auto parts, elevators, transformers, construction machinery, wires and cables, and forklifts.

KITA particularly pointed out that auto engine parts, which were previously exempt, are now also subject to tariffs, which will inevitably damage the industry.

Source: DKNET News

PSR Analysis: U.S. tariffs of up to 50% on steel and aluminum products could impose broad cost pressures on South Korean cranes, construction machinery, compressors and auto parts. This would reduce the profitability of exports to the U.S., and manufacturers are expected to respond in the short term by passing on price increases and adjusting inventories. In the medium term, they are likely to shift production to the U.S. or within the USMCA region, source parts locally and substitute materials. They are also likely to intensify efforts to apply for tariff exemptions and engage in lobbying activities. PSR

Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research

According to the Korea Trade and Investment Promotion Agency (KOTRA), automobiles are South Korea’s leading export to the United States. Exports to the United States account for over 50% of South Korea’s total automobile exports. The South Korean government prioritized reducing automobile tariffs and engaged in negotiations with the United States.

In a report compiled in May, the Bank of Korea, South Korea’s central bank, also pointed out that sluggish automobile exports were the biggest risk. South Korea has a free trade agreement with the United States. Before the 25% tariff on automobiles was imposed in April under the Trump administration, South Korea could export automobiles to the United States without paying tariffs. Initially, South Korea insisted on a 12.5% tariff because it had no basic tariff rate, but the US would not budge from 15%. Although the worst has been avoided, price competitiveness in the US market may still be damaged.

Source: The NikkeiPSR Analysis: For South Korea, which relies heavily on exports, reaching an agreement with the U.S. on tariffs was crucial for maintaining its industries. The negotiations ended with tariff rates equivalent to those of Japan and the EU, which is positive for maintaining price competitiveness in North America. However, the situation regarding semiconductors, an important export alongside automobiles, has not yet been finalized. It will be necessary to closely monitor this situation. PSR

Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research

The $21 billion investment in the U.S. will be the largest ever made by the Hyundai Motor Group. The investment will be made between 2025 and 2028 and will cover a wide range of fields, including automobiles, steel, parts and energy.

Through all investments, the company will create 14,000 direct jobs in the U.S. by 2028. In the steel industry, Hyundai Steel, a subsidiary of Hyundai Motor, will build its first electric arc furnace steel mill in the U.S. in Louisiana. The plant will have an annual production capacity of 2.7 million tons and will supply steel to the Group’s complete vehicle plants in Alabama and Georgia. The steel mill is expected to create 1,300 jobs annually. In addition to steel for electric vehicles, the investment will include parts and a wide range of materials.

In the automotive sector, the group, which also owns Kia, will invest a total of $9 billion to build a production capacity of 1.2 million vehicles per year in the United States. Hyundai Motor Group’s production volume in the United States in 2024, when final numbers are reported, is expected to be around 700,000 vehicles. The Group is expected to increase this by approximately 70% over the next four years. It will also invest $6 billion in cutting-edge fields such as autonomous driving, AI and robotics, as well as infrastructure-related fields such as small modular reactor (SMR) technology and renewable energy.

Source: The Nikkei

PSR Analysis: This news report was published March 25, but since then the Trump administration has announced a 25% reciprocal tariff rate for South Korea. The South Korean Prime Minister has already had a phone conversation with Trump, but it is still unclear what progress will be made from here. South Korean manufacturers’ exports to the U.S. are growing, and in the five years to 2024, the number of cars imported by the U.S. from South Korea will increase by 60% to 1.36 million. Given that the tariff on South Korean cars exported to the US was previously zero, 25% will have a significant impact. South Korea will want to continue negotiations by pointing out the planned large-scale investment in the US. PSR

Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research