Arya News - Chip exports seen climbing to $180b next year on AI-driven memory demand.
SEOUL – South Korea’s semiconductor and display industries are set to be clear winners in 2026, driven by surging global investment in artificial intelligence infrastructure, while petrochemicals, steel and construction will remain under sustained pressure amid China’s growing manufacturing dominance and persistent trade uncertainty, a business survey showed Sunday.
In its “2026 Industry Outlook,” the Korea Chamber of Commerce and Industry surveyed 11 major industry associations and classified sectors using a weather-style forecast to signal relative performance next year.
Semiconductors and displays were rated “clear,” indicating strong growth prospects, as AI data centers fuel demand for high-bandwidth memory chips and high-specification panels. Batteries, bio, automobiles, shipbuilding and textiles were assessed as “mostly clear,” suggesting moderate but positive momentum. In contrast, machinery, petrochemicals, steel and construction were labeled “cloudy,” pointing to weak or constrained outlooks.
“China’s manufacturing competitiveness is strengthening at a rapid pace, putting pressure on all domestic industries,” said Lee Jong-myung, head of industrial innovation at KCCI.
“Sustained, aggressive experimentation by companies centered on AI, supported by bold regulatory reform and incentives will be critical in the coming year.”
Chip exports are expected to rise 16.3 percent this year to $165 billion, followed by a further 9.1 percent increase in 2026 to $180 billion, driven by growing demand for high-value DRAM used in AI data centers, the survey showed.
KCCI underscored that global technology companies including Microsoft, Amazon and Google parent Alphabet are projected to invest about $100 billion in AI infrastructure in 2026 alone, with spending expected to go further in subsequent years.
The display industry was also forecast to remain strong, with exports projected to increase 3.9 percent on-year to $17.67 billion in 2026, supported by rising demand for power-efficient organic light-emitting diode panels amid higher device specifications.
The Korea Display Industry Association said global OLED shipments for automotive displays and extended-reality devices were expected to jump 83.3 and 238.5 percent, respectively, next year.
Batteries were rated “mostly clear,” with exports projected to grow 2.9 percent in 2026, supported by rising ESS demand from power-hungry AI servers. Electric vehicle battery demand is also expected to rebound as new models using Korean batteries are launched by automakers including Hyundai Motor, Kia and BMW.
The KCCI, however, viewed that the growing risks from China and a scaling back of benefits from the US Advanced Manufacturing Production Credit remain downside factors. Chinese battery-makers accounted for more than 77 percent of global market share in 2025, with their share in non-Chinese markets rising to 46.5 percent, overtaking Korean firms, accounting for 38.7 percent, for the first time.
The bio sector is expected to benefit from expanded domestic contract development and manufacturing capacity and potential spillover demand from US biosecurity policies, with higher prospects for large-scale outsourcing contracts, the report said.
Automobile production is forecast to rise 1.2 percent to 4.13 million vehicles in 2026, while exports are expected to increase 1.1 percent to 2.75 million units, supported by new EV plants coming online in Ulsan and Hwaseong, Gyeonggi Province.
The Korea Automobile & Mobility Association noted that while the export conditions have improved following the easing of US tariffs to 15 percent from 25 percent, the rapid global market share gains of Chinese automakers pose a major threat.
“We need government’s support including incentives to boost domestic production, to counter China’s low-price offensive,” KAMA said.
Shipbuilding exports are projected to climb 8.6 percent to $33.92 billion, led by liquefied natural gas carriers and container ships, although uncertainty remains over the pace of transition to low-carbon vessels following delays in international emissions rules.
Petrochemicals are expected to see exports fall 6.1 percent in 2026 due to Chinese oversupply and weak prices, although capacity reductions in Europe and China could gradually ease the glut, KCCI said.
Steel exports are forecast to decline 2.1 percent, weighed down by Chinese competition and tighter import controls in the US and EU.
Machinery exports are expected to fall 3.7 percent, reflecting uncertainty linked to US tariff policies under the Donald Trump administration, although demand from Middle Eastern plant projects could limit the downturn.
Construction was rated “cloudy,” as high interest rates, tighter project financing and rising labor and safety costs continue to constrain private investment, partially offset by increased public infrastructure spending.
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