Trend Korean industry is splitting between AI and green growth sectors and pressured commodity manufacturing

Summary

KIET finds that intensifying competition with China in EVs and semiconductors, US tariffs, stricter EU rules and war-driven costs are raising uncertainty across all industries. Within that environment, industries serving AI and eco-friendly demand keep growing, while commodity manufacturing faces fiercer export competition and profit pressure. The institute expects second-half growth to centre on semiconductors, telecommunications equipment, batteries and biohealth, backed by AI investment and demand for high value-added products. Automobiles grow gently on the competitiveness of eco-friendly vehicles and shipbuilding holds up as high-priced orders are delivered, while general machinery stays in a limited adjustment phase as the domestic recovery lags. Refining and petrochemicals gain higher export prices from rising oil but keep output restrained through conservative refinery operation. Appliances recover only modestly despite base effects because of tariffs and expanding overseas production.