All articles tagged with #south korea economy
Asian markets slide as an AI-driven sell-off deepens, led by SK Hynix and Samsung with Kospi halting after steep declines; investors worry memory-price cycles and looming oversupply could damp AI demand, though analysts see potential near-term gains as deleveraging progresses and earnings outlook improves.
South Korea’s central bank raised its policy rate by 0.25 percentage point to 2.75%, the first hike in more than three years and the first under new governor Shin Hyun-song, as inflation pressure from a semiconductor-driven AI boom grows. The move sent the Kospi down over 6% and the won to around 1,484 per dollar, with consumer inflation at about 3.2% in June and energy costs rising. Officials cited chipmakers’ strong demand, wage gains and broader domestic demand as reasons for tighter policy, and analysts expect further hikes later this year and into 2027 to contain inflation while supporting growth.
South Korea’s president urged a balance between labor and management as an 18-day Samsung Electronics strike threatens about 47,000 workers. The union demands a bonuses system worth 15% of operating profit, removal of payout caps, and a formal structure; Samsung has offered 10% of operating profit for bonuses plus a one-time payment. The government warned of possible emergency measures if the strike harms the economy, with direct losses estimated up to 1 trillion won and up to 100 trillion won if chip production is disrupted, highlighting Samsung’s outsized role in exports and GDP. Final talks were framed as the last chance to avert a walkout.