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South Korea's economy surges forward with massive corporate AI investments, while its security environment deteriorates under relentless North Korean missile tests and nuclear threats, forcing Seoul to balance external alliance demands with domestic stability concerns.
March 2026
Week of Mar 16, compared to 12-week average
broadly favourable, with some neutral reporting
The economy is in a state of aggressive expansion in the AI and semiconductor sector, led by massive corporate investments. Samsung announced a $73 billion investment in AI chips and partnered with both AMD and Nvidia, while SK Hynix placed a huge order for chipmaking tools and began a US listing process. This boom is driven by AI chip demand straining supply chains, creating major opportunities for these firms.
Foreign policy is dominated by managing Middle East security requests and responding to North Korea's diplomatic outreach. The US asked South Korea to help secure a key global oil shipping route, and FM Cho urged Iran to ensure safe passage for South Korean vessels in the Strait of Hormuz. Meanwhile, North Korea deepened ties with Belarus and Iran, hosting Lukashenko and signing a friendship treaty.
The security situation is deteriorating due to intense North Korean military provocations and the potential reallocation of US defensive assets. North Korea fired 10 ballistic missiles during US-South Korea drills, tested a new solid-fuel missile engine, and Kim Jong Un vowed to permanently cement the country's nuclear weapons status. Concurrently, the US is in talks to shift some Patriot systems to the Middle East.
Society is grappling with acute industrial safety failures and related public anxiety. A major fire at a car parts factory caused multiple casualties, highlighting persistent workplace hazards. This incident, coupled with Middle East conflict fears, triggered public panic buying of rubbish bags and prompted Seoul to consider public driving restrictions for the first time in 35 years.
