Global Players Vying for Lead in Chip Market

Focus Industry ICT Placed in the Hands of Court To Develop Connected Car OS on Its Own Based on 3GPP Rel. 16 KDB and KCGI in Conflict over Korean Hyundai Motor Group Chooses Nvidia Samsung and SK Telecom Complete Air's Acquisition of Asiana Airlines Chips for Its Cars Next-Gen. 5G Core Development

november 2020 / VOL.37 NO.398 www.businesskorea.co.kr Semiconductor War Global Players Vying for Lead in Chip Market

12,000 won 11

ISSN 1016-5304 Contents 2020 / Vol.37 No.398

Trade Expansion Act ict South Korea’s Trade Deficit with Japan Rising Again 36 Korea’s ICT Exports Hit US$16.4 Bil. in 19 South Korean Government Likely to October Reject Lone Star’s Offer Korea’s Semiconductor Exports to Google Causing Controversy with China Increasing 37 Vietnam Requests Samsung to Make Place Names Investment in Semiconductors Samsung’s 5-nm Exynos to Go into Cover Story China's Vivo 5G Phone 20 Global Players Vying for Lead in Chip 38 Samsung, SK hynix All-out to Develop Market 4th-Generation DRAMs The Market for DDR5 DRAM to Grow in Earnest from 2021 MONEY 39 Samsung and SK Telecom Complete 26 Bill Tabled against Speculative Real Next-Generation 5G Core Development Estate Transactions by Non-resident 40 SK Telecom to Set Up a Joint Venture Foreigners with Deutsche Telekom SK Telecom Forge Alliance with Amazon Survival of Cryptocurrency Exchanges 41 SK Telecom Unveils AI Chip and New Hinges on Banks Plans for AI Semiconductor Business 27 Foreign Currency Deposits Hit All-time 42 Google Postpones App Fee Adjustment High FOCUS KFTC About to Finalize Google AFA South Korea’s External Financial Assets 08 KDB and KCGI in Conflict over Korean Investigation Air's Acquisition of Asiana Airlines Reach New High in Q3 43 Chinese Smartphone Maker Unveils a 28 Major South Korean Banks Remaining Rollable Phone Ahead of LG Electronics Sluggish Abroad NATIONAL 44 Huawei Outclasses Samsung and Apple Worker Director Appointment in the in Smartphone Camera Performance 10 World’s Largest Economic Bloc Created Financial Sector Still Distant U.S. Approves Samsung Display’s from RCEP 29 Listed Companies’ Net Profits OLED Panel Exports to Huawei Biden Administration Likely to Request U.S. Substantially Increase in Q3 45 Korean Parts Take up Largest Share in Allies’ Participation in GVC Realignment Listed Companies' Free Cash Flow Total Price of iPhone 12 11 U.S. House of Representatives to Cover Grows 163% from a Year Ago Samsung and LG Set to Benefit from Draft Resolutions for Stronger KORUS 30 Listed Companies Increasing Dividends BOE’s Drop from Apple’s OLED Panel Alliance Foreign Investors Net Buy 1.36 Tril. Won Supplier List South Korea and Russia Likely to Vie of Korean Stock Market Last Month 46 Samsung Reclaims Top Spot in World for Dukovany Nuclear Power Station 31 Stock Issuance Likely to Hit All-time Smartphone Market 12 Bank of Korea Raises GDP Growth High This Year 47 Samsung Overtakes Apple as Biggest Forecast Investor Deposits in Stock Market Hit Smartphone Vendor in the U.S. Market South Korea Expected to Rise in Global an All-time High in Q3 GDP Rankings This Year 32 IPO Stock Allocation for Individual Korean Display Makers Slowing Down 13 FDI in South Korea Decreases for Investors to be Expanded Pace of Withdrawal from LCD Market 2 Consecutive Years South Korean Investors Buying More Samsung Electronics and LG South Korea’s Current Account Surplus and More Real Estate in the U.S. Electronics Hog Global TV Market Tops US$10 Billion in September 33 Korea Exchange Cracking Down on 48 Mini-LED TV Market Expected to Grow 14 South Korean Government’s Debt Next Year Naked Short Selling Soaring 49 Applications for Patents on Rollable Short Sellers’ Participation in Paid-in Household Credit at Record High TVs on Sharp Rise Capital Increase Likely to Be Limited 15 South Korea Declares Carbon LG Electronics Registers Patent on 34 Financial Authorities Considering Neutrality by 2050 Rollable Laptop 16 South Korean Labor Market Far from Expanding Short Selling for Individual Investors Flexible INDUSTRY South Korean Government in No Hurry Individual Investors Making Profitable to Get COVID-19 Vaccines Foreign Stock Investment This Year 50 Overseas Sales of Major Companies 17 South Korea’s Exports Fall 3.8% in October NPS to Increase Overseas Investment Rebound in Q3 Import Restrictions on South Korean While Tightly Managing Currency South Korean Enterprises Maintaining Products on the Increase Composition Investment Despite COVID-19 18 Korean and U.S. Business Leaders Call Insurers' Profits Way Below Market 51 Manufacturing Business Conditions for Revision of Section 232 of U.S. Expectations Improving

04 Automobile Imports from Japan Soar 60 Kona EV Fires Put Brakes on Hyundai 70 Lotte Group Cuts Number of in October Motor-LG Chem Battery Joint Venture Executives by 20% 52 Chemical Companies Working on in Indonesia 71 Coupang to Discount Direct Purchase Green Plastic Materials 61 Chinese and Japanese EV Battery Deals up to 55% in Black Friday KFTC to Impose Fine on GTT of France Makers Promoting Plants in Europe Doosan Heavy Industries to Verify Green for Market Dominance Abuse China and Japan Ahead of Korea in EV Hydrogen Technologies in Jeju Island 53 Korean-made Solar Cells’ Share of Domestic Battery Materials 72 SK Innovation Taking Aim at 3rd Place Solar Module Market Slides to 20% 62 U.S. ITC Requests LG Chem and SK in Global Electric Vehicle Battery Market South Korea to Work on Gas Turbines Innovation to Present Transcripts of LF Hazzys Opens 5th Store in Vietnam, to Break Oligopoly Interviews with Ford and Volkswagen with 6th Store Due to Open in Dec. 54 South Korea’s Automobile Exports and 63 LG Chem-SK Innovation Battery 73 LS Cable & System Strikes Submarine Production Fall Again in October Lawsuits Prolonged Cable Supply Deal with Orsted Korea Automotive Technology South Korean Shipbuilders Anticipating Daewoong Pharmaceutical to Release Institute Localizing Self-driving Increase in LPG-powered Vessel Orders Foistar Tab as COVID-19 Treatment in Technology Successfully 64 Korean Shipbuilders Face Dwindling January 2021 55 Future Car-related Patent Applications Chances to Win Tender for Design of 74 Samsung SDS Showcases Digital on the Increase FPSO for Arctic Wisting Oil Field Innovation Technologies at Techtonic Hyundai Mobis Increasing Investment Korea Successfully Localizes Gas 2020 Developer Conference in Future Auto Parts Turbines for LNG Power Generation Shinhan Financial Group Successfully 56 Hyundai and Kia Enjoy Rebounds in South Korea Suffers a Sharp Drop in Arranges Acquisition Financing Global Utilization Rates Crude Steel Production 75 Donginbi of Cheong Kwan Jang Now South Korea Places Fifth in Passenger 65 Steelmakers Make U-Turn to Korea Available on Amazon.com Car Production in 2019 One After Another Disciplinary Measures Taken Against 57 Korean Government to Facilitate 66 Container Carriers Extremely Hard to Come By Hanwha Life Insurance Electric Vehicle Charging Ocean Freight Charges Rising Rapidly Hyundai Motor Group Places 4th in SME & STARTUP Global Electric Vehicle Sales IR & MANAGEMENT 58 Hyundai Motor Group Chooses Nvidia 76 BlueVisor Takes Second Place in Chips for Its Cars 68 Change in Samsung Group Governance Fintech Unicorn Battle in Asia 59 Hyundai Motor Contradictory in Structure Likely to Take Time Quantum Gate Gearing up for Global Handling Kona Electric Fires 69 Dividend Payments by Samsung Debut through Successful Entry of Kona EV Recall Almost Completed, but Group Affiliates Expected to Increase Public Market Car Owners File Class Action Suit for Labor and Management of Samsung 77 Autonomous Vehicle Simulation Compensation Electronics Hold a Historic First Meeting Startup MORAI Closes US$1.8M Series A Funding Round

SCIENCE & Looking for a house, apartment or office? TECHNOLOGY 78 UNIST Develops Improved Organic Real Estate & Relocation Co, LTD. Semiconductor-based Photoelectrode Korean Researchers Shed New Light We look forward to helping you to find your next dream property anywhere in Seoul. on Cause of Alzheimer's Disease 79 Much Less Expensive Hydrogen 1. Residential or Commercial Property Searching 3. After Service - Ability to explore and reserve a variety of properties - Moving arrangements and furniture set-up Production Catalyst Developed by IBS - Recommendations of suitable properties - Interior decoration and design South Korea’s Artificial Sun Sets New - Enrollment in fire, theft and other types of insurance Record 2. Contract 4. Support - Careful review of all related documents - Registration of residence at the local district office, etc - Negotiation of drafting terms and other conditions - School enrollment for children, etc Lifestyle - Closing lease agreement in contract - Assistance for opening a bank account, etc 80 Dulwich College Seoul Builds up Expertise in Blended Learning, New Head of College Says 82 Kimchi Exports from South Korea Increasing Rapidly

) Chinese’ Land Ownership in South Head Office 02 730-0001 www.rentcorea.com email. [email protected] Korea Increasing Rapidly Corporate Headquarters : RentCorea B/D 1F~2F, #36-1, Seongbuk-dong, Seongbuk-ku, Seoul, Korea. Registration No.209-06-83139. Permit No.9230000-1709. The President/Realtor. Kiwan, Sung. Oriental Brewery to Do Business in a Greener Way

05 Korea’s Most Influential Business Monthly Since 1983 To Our Readers

Give and Take for Publisher: Park Jung-hwan Chief-in-Editor: Yu Kun-ha Stronger U.S.-South General Editor: Lee Kwang-soo Supplementary Editor: Lee Song-hoon Managing Editor: Youn Won-chang Korea Alliance Culture/Tourism Editor: Choi Mun-hee Reporter: Cho Jin-young, Marie Kim, Jung Suk-yee, Jung Min-hee, Michael Hurh, Sara Rai Contributing Writers: Seok Joon, Suh Bo-yun, Gho Chang-soo Designer: Jang Seung-eun Much attention is being paid to how the International Liaison: Sara Rai Advertising Manager: Jung eui-jung KORUS alliance and its efforts for the denucle- Administration Manager: Jung Min-hee Circulation Manager: Lim Moon-joo arization of North Korea will change under the

Published By : BusinessKorea Co., Ltd. : 301 Samdo Building, Joe Biden administration. 12-1 Yeoido-dong, Yeongdeungpo-gu, Seoul, Korea 150-010 Mailing Add.: 301 Samdo Building, South Korean President Moon Jae-in had his first phone conversation with 12-1 Yeoido-dong, Yeongdeungpo-gu, Seoul, Korea 150-010 Tel: (02)578-3220 Fax: (02)578-3224 the new U.S. president elect on Nov. 12, expressing his hope for even closer Government Registration Number: RA-2743 Dated March 18, 1983. Printed by Hwashin Printing Tel: (02)2277-0624 cooperation for further development of the alliance, a nuclear-free Korean Pen- insula and permanent peace in the peninsula. The U.S. president elect remarked that the United States will maintain its defense commitment and work very Overseas Representatives Australia closely with the South Korean government to achieve the denuclearization, McLean Media Representations Pty., Ltd. P.O.Box 544, Newtown NSW 2042, Australia saying South Korea is a linchpin for Indo-Pacific security. Tel: (612) 519-6455, Fax: (612) 577-1614 Belgium The U.S. think tank Center for a New American Security also commented Staf Wuyts, AD International Bld. Lambermont 140 B-1030 Brussels, Belgium in its recent report that the new administration needs to make South Korea play Tel: (02) 216-0730, Fax: (02) 216-4632 Canada an essential role for its vision in the Indo-Pacific region. The report contains a Globe Media International 444 Front Street West, Toronto, Ontario, Canada M5V 2S9 wide variety of advice on South Korea’s bigger role in checking China, such as Tel: (416) 585-5415, Tlx: 06-219629, Fax: (416) 585-5275 Finland a bigger role of United States Forces Korea and South Korea’s participation in Seppo Lehtinen, Seppo Lehtinen Oy Fredrikinkatu 33 B, 00120 Helsinki, Finland the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Tel: (90) 611471, 647412, Tlx: 12-2814 sigco sf, Fax: (90)609114 Germany Under the circumstances, the U.S. House of Representatives unanimously Franz Brunsing, Industrial Export Services Buttgenweg 18, D 4000 Dusseldorf 11, Federal Republic of Germany Tel: (0211) 59 26 22, Tlx: 8587465 SERV D, Fax: 49-211-59-611-43 adopted two resolutions on Nov. 18. One is to revalue the importance of the Hong Kong Serina Cheung, Managing Director, Media Services Network alliance and Korean Americans’ contribution to American society and the other 10/F Flat A, Sun Hey Mansion, 72 Hennessy Road, Wanchai, Hong Kong Tel: 529-3677, Fax: 866-2398 is for global partnership formation based on the alliance and in commemora- Indonesia Yoly de Rivera tion of the 70th anniversary of the Korean War. P.T. MEDIANET INTISARANA Kerayoran Baru, Jakarta Selatan 12110, Indonesia For past several years, however, the U.S. administration jeopardized the Tel: 7202587, 7202488 Fax: 7202651 Italy KORUS alliance by calling the Special Measure Agreement into question and Carlo E. Calcagno, Studio Calcagno Srl, International Media Representative demanding more defense costs. The resolutions, however, mention the necessi- Via Copernlco, 22-20125, Milano, ltaly Tel: (392) 689-4891 Fax: (392) 607-0773 ty of an early conclusion of a mutually acceptable multi-year agreement, which Japan Japan Advertising Communications means it can be reasonably concluded in the early days of the new government. Three Star Building, 3-10-3 Kanda Jimbocho Chiyoda-ku, Tokyo 101 Tel: (3) 3261-4591, Fax: (3) 3261-6126 In the meantime, Beijing sent State Councilor and Minister of Foreign Netherlands A.A. Van der Graaf, Office Manager Affairs Wang Yi to Seoul on Nov. 25 with tension rising against Washington. Publicitas b.v., Maassluisstraat 414, 1062 GS Amsterdam, Netherlands Tel: 020-178795, Tlx: 11656 PUBAM NL, Fax: 020-174414 His three-day visit was to forestall Seoul’s lopsidedness to Washington and Philippines Mr. Paul Ligones, ASPAC strengthen Seoul-Beijing relations with President Xi Jinping unlikely to visit P.O.Box 7226, Domestic Airport Post Office Tel: 827-3950, 827-4477, Tlx: 64838 LTA BCPN, Fax: (632) 817-5802 Seoul within this year contrary to President Moon Jae-in’s expectations. Singapore Hoo Siew Sai With the new U.S. administration predicted to rebuild its alliance with Major Media Singapore Pte Ltd., 6th Floor, 52 Chin Swee Road Singapore 0316 Tel: 7380122, Fax: 7382108 South Korea and Japan to keep China in check, the state councilor particularly Sweden, Norway and Denmark Sten Janson, Business Books in Saro AB stressed the importance of China’s cooperation with South Korea and Japan as Gihlsrovagen 19, S-43040 Saro, Sweden Tel: 46-31936220, Fax: 46-31151333 well as bilateral cooperation with South Korea. This implies that China will Switzerland Joseph Pollet, Managing Partner continue to check the U.S. alliances in Northeast Asia while mentioning the IPP International Publications Partners P.O.Box 3329, CH-4002 Basel Tel: 061/35 27 66, Fax: 061/35 24 88 development of collaboration with South Korea and Japan. Taiwan Lewis Int’l Media Services Co., Ltd. South Korean enterprises, meanwhile, are in a catch-22 situation with the Floor 11-14, No. 46, Sec. 2, Tun Hua South Road, Taipei, Taiwan, Republic of China superpowers increasingly vying for hegemony. We hope the new U.S. admin- Tel: 886-2-7075519 or 7087727, Fax: 886-2-7098348 Thailand istration will seek measures to alleviate the diplomatic burden of South Korea, Anthony Sharma, Thai Representation Ltd. Thai Representation-867 58 Sukhunvit 101, Prakanong, bangchak, Bangkok which has had the dilemma of eco- 10260. Thaliand Tel: 662-3320503-4, 662-3319690-2 Fax: 3319303 nomic reliance on China and security United Kingdom Anthony Tumer, Managing Director, The Colin Turner Group reliance on the United States. If so, City Cloisters, 188-196 Old Street, London EC1V 9BX Tel: 71-490-5551, Tlx: 261140 TURNER G, Cable: TURNERSYND the South Korean government will LONDON ECI Fax: 71-490-2271 have to positively consider joining U.S. Mrs. Clair Chun / U.S. Correspondent Quad Plus as a way of strengthening Park Jung-hwan, 390 17th ST NW #4065 Atlanta, GA, 30363 Tel:770-880-6722 Email:[email protected] the KORUS alliance. Publisher & Editor-in-Chief

06 focus

Placed in the Hands of Court KDB and KCGI in Conflict over Korean Air's Acquisition of Asiana Airlines

By Choi Moon-hee

business performance. The bank added that it would watch the process very closely. The debt ratios of Korean Air and Asiana Airlines amounted to 737 percent and 2,432 percent at the end of the third quarter of this year, respectively. Besides, their lack of funds is estimated at 4.8 trillion won for next year. In other words, financing is urgently needed in both. Once Korean Air acquires Asiana Air- lines, approximately 2.5 trillion won can be procured through paid-in capital increase. “The early capital increase is possible because capital market participants are anticipating an increase in corporate value

Korea Development Bank's plan to help Korean Air take over ailing Asiana Airlines is based on the business combination,” the KDB said, adding, facing opposition from KCGI, an activist fund promoting a hostile takeover of Hanjin “With COVID-19 still going on, it is not easy for Korean Air to KAL, the parent company of Korean Air. carry out large-scale financing in the capital market on its own.” “Corporate M&A is basically based on financing by an onflicts over a Korean Air-Asiana Airlines merger acquirer, not a major shareholder, and private property dona- are continuing between Hanjin Group teaming up tion from Hanjin KAL major shareholders cannot be demanded Cwith the Korea Development Bank (KDB) and the with the company not subject to any restructuring,” it went on to alliance of activist private equity fund KCGI, former Korean say, continuing, “Normalization measures targeting distressed Air vice president Cho Hyun-ah and Bando Engineering & Con- companies, such as capital reduction without refund, debt-equity struction. The two sides are issuing press releases over and over swap by creditors and restructuring plan implementation, cannot to deny each other’s arguments. With the three-party alliance be applied to the normal company of Korean Air.” having applied for a court injunction to block new stock issu- KCGI, which has been in conflict with the chairman over ance and the merger hinging on whether the application will be the rights to manage Hanjin Group, issued a counter-press accepted, both sides are trying to form as many friendly public release immediately. “The capital increase through third-party opinions as possible. allocation of Hanjin KAL is rough, inappropriate and illegal, The KDB reiterated in its unscheduled Nov. 26 press release and we are humbly waiting for the ruling of the court,” the PEF that it is working on the merger in strict compliance with the said, adding, “Though belated, more opinions should be gath- three principles of corporate restructuring, that is, responsible ered from and publicly discussed with the general public as roles of major shareholders, sharing of burden by interested par- taxpayers, aviation industry experts and the interested parties ties and preparation of a normalization plan to guarantee busi- including shareholders, executives and staff members so that ness sustainability. the future restructuring of the industry can be conducted with According to the state-run bank, Hanjin Group chairman concreteness.” Cho Won-tae provided 100 percent of his Hanjin KAL shares, Especially, the PEF stressed that the KDB is threatening the worth 170 billion won in total, as collateral with regard to any court by claiming that the court’s injunction will lead to a can- violation of the investment agreement. At present, the chairman’ celed deal and Asiana Airlines’ bankruptcy. shares are worth a total of 273 billion won. The bank explained Earlier, KCGI applied for the court injunction after KDB’s that the collateral can be disposed of and the chairman’s resig- capital increase resolution in relation to Hanjin KAL. After the nation is possible if its management assessment shows that the application, Hanjin Group said in a statement that the injunction chairman fails to meet expectations related to the merger and will block Hanjin KAL’s capital increase and the merger. KDB

08 focus

occur with a series of events of default, capital impairment and administrative issue designation, license cancellation, and mass unemployment,” Hanjin KAL said. However, some in the financial sector are questioning the necessity of the 600 billion won investment by the end of this year. Although a capital impairment of over 50 percent in the year-end business report leads to the designation and Asiana Airlines’ impairment was 50.2 percent at the end of the third quarter, the designation will become unlikely, in spite of the massive Q4 net loss, after the 3:1 capital reduction late this year. This is why it is said that the mentions about administrative issue designation and lower credit rating attributable to a failed capital increase are to instigate fear. Especially, after the deal between Asiana Airlines and HDC

KCGI applied for the court injunction after KDB’s capital increase resolution in relation Hyundai Development Company failed in September this year, the to Hanjin KAL. bank provided no less than 2.4 trillion won for the airline from the key industry stabilization fund. At that time, KDB Vice President Chairman Lee Dong-gull also remarked that Asiana Airlines Choi Dae-hyun stressed that no additional support would be nec- may have to go under depending on the court ruling. essary for a while in view of the size of the financial support. “If the financing within this year is not necessary, the deci- Rumors about Asiana Airlines’ Year-end Crisis sion in question to receive funds only from the KDB with existing shareholders excluded will be hardly acceptable,” said a Rumors are circulating that Asiana Airlines will face a crisis jurist who provided restructuring consulting for the bank in the next month with the court now handling the issue of Hanjin past, adding, “If the court concludes that the financing within KAL’s capital increase through third-party allocation for Korean this year is unnecessary and accepts the injunction application, Air to acquire Asiana Airlines. This is because the court proce- Hanjin Group chairman Cho Won-tae will be caught in a trap, dure will revolve around whether the financing was so urgent as proving himself that he put management right protection before to rule existing shareholders out of capital increase participation, business combination in the event of deal cancellation.” that is, how much the likelihood of the bankruptcy will go up if Asiana Airlines fails to receive hundreds of billions of won by IATA Positive about the end of this year. Korean Air-Asiana Airlines Merger The first hearing of the case took place on Nov. 25. The court is likely to reach a conclusion this week in that the pay- In the meantime, the International Air Transport Associa- ment due date for the capital increase is Dec. 2. tion (IATA) made a positive remark on the merger at its annual As mentioned above, the case is mainly about the access general meeting, the largest conference in the global aviation to new shares limited by Hanjin KAL to third parties and the industry. legitimacy of the limitation against existing shareholders from Hosted by Dutch airline KLM, the meeting took place from the viewpoint of urgency in management. The Commercial Act Nov. 23 to 25. The Asia-Pacific media session of the meeting of South Korea stipulates that a shareholder is entitled to receive covered the merger between Korean Air and Asiana Airlines. new shares in proportion to the number of his or her shares. In that session, IATA Asia-Pacific Regional Vice Presi- However, the same act also stipulates that a non-shareholder can dent Conrad Clifford said that Korean Air’s decision to acquire receive a new share in accordance with the articles of associa- Asiana Airlines is a good example of how corporate survival and tion if it is to achieve a business purpose such as new technol- employment maintenance can be achieved at the same time with ogy introduction and financial structure improvement. The arti- airlines across the world going through extreme difficulties. cles of association of Hanjin KAL also stipulate that third-party The IATA also mentioned that the prolonged difficulties may allocation is possible when financing is urgently needed. lead to more mergers in the Asia-Pacific aviation industry with Both Hanjin KAL and the KDB are stressing the urgency of borders remaining closed and cross-border travel halted in the the financing for Asiana Airlines, claiming that it must be com- wake of COVID-19. pleted within this year. They are planning to invest 1.8 trillion “Korean Air is expected to become a top-tier player in the won in Asiana Airlines by the second half of next year by buy- global market by acquiring Asiana Airlines,” U.S. magazine ing new shares and perpetual bonds and one-third of the invest- Aviation Week commented, adding, “Especially, the merger is ment is scheduled to be made this year in the form of down pay- likely to boost their competitiveness in the air cargo transport ment and perpetual bonds. “If this financing fails as a result of industry with freight transport already accounting for a large the injunction application, a fall in credit rating will inevitably portion of the business of both.”

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15 Member States’ Trade Volume Amounts to US$5.4 Tril. World’s Largest Economic Bloc Created from RCEP By Jung Suk-yee

he 10 member states of the ASEAN, South Korea, Aus- Ttralia, New Zealand, China and Japan signed the Regional Comprehensive Economic Partnership (RCEP) online on Nov. 15. As of the end of last year, the 15 states’ trade volume amounted to US$5.4 trillion, their combined nominal GDP was US$26.3 trillion and their combined population was 2.26 billion, approximately 30 percent of the global total each. The RCEP is larger than the United States-Mexico-Canada Agree- ment (USMCA) and the Comprehensive and Progressive Agree- ment for Trans-Pacific Partnership (CPTPP). For South Korea, the RCEP means an additional tariff elimination of 1.7 percent to 14.7 percent and an increase in tariff elimination rate to 91.9 percent to 94.5 percent. Last year, South Korea’s exports to the RCEP members totaled US$269 billion, 50 percent of its total exports, whereas the exports to The 10 member states of the ASEAN, South Korea, Australia, New Zealand, China and Japan have created the world's largest trade bloc. the USMCA and CPTPP members were US$89.8 billion and US$126 billion, respectively. CPTPP are complementary and Australia, New Zealand, Japan The South Korean government stressed that the conclu- and the four ASEAN member states including Vietnam and Sin- sion of the RCEP was led by the ASEAN. “The RCEP and the gapore participate in the CPTPP as well,” it explained.

Protectionist Policy Likely to Be Maintained against China Biden Administration Likely to Request U.S. Allies’ Participation in GVC Realignment By Jung Suk-yee

he Korea Institute for International Economic Policy Tsaid in its report on Nov. 6 that U.S. President-elect Joe Biden is likely to ask U.S. allies to take part in U.S.-led global value chain realignment. “The Biden administration is forecast to approach trade issues based on free trade policies and multilateralism centered on the WTO,” the institute said, adding, “At the same time, however, it will be a protectionist when it comes to trade policies related to China and global value chain development led by the United States.” According to the institute, the administration is likely to reform the WTO so that the United States can become more central in the organization and it can have more leading roles U.S. President-elect Joe Biden in international trade issues such as digital trade and subsidies for state-run enterprises. The institute also pointed out that the “As for its trade war against China, the United States is like- United States is likely to return to the Comprehensive and Pro- ly to put pressure based on multilateral diplomacy and its influ- gressive Agreement for Trans-Pacific Partnership (CPTPP) for ence in the WTO and the CPTPP rather than direct tariffication,” more influence on the Asia-Pacific region. it continued to say.

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Korea-U.S. Alliance Crucial for World Peace U.S. House of Representatives to Cover Draft Resolutions for Stronger KORUS Alliance By Jung Suk-yee

.S. Representative Tom Suozzi’s draft resolution for a Ustronger Korea-U.S. alliance is scheduled to be handled at a plenary session of the House of Representatives scheduled for Nov. 18. The House Foreign Affairs Committee passed the draft resolution unanimously in March and it is likely to be adopted soon. According to the draft resolution, South Korea is a U.S. ally sharing the values of democracy, free market economy, human rights and the rule of law. It specifies that the alliance is playing an important role for more peace and security in the Indo-Pacific region, the alliance is important for U.S. interests in East Asia and the United States and South Korea need to work more closely together in diplomacy and security as well The U.S. House of Representatives is scheduled to handle draft resolutions for a stronger Korea-U.S. alliance on Nov. 18. as economy. The draft resolution also mentions the necessity of a multi- ing the alliance into a global partnership of mutual interest. In year Special Measures Agreement (SMA). The Donald Trump the draft resolution, both Democrats and Republicans stress that and Moon Jae-in administrations signed the 10th version of the the KORUS alliance is playing a crucial role for world peace, defense cost sharing agreement on a single-year basis last year. as well as peace in Asia, against recurring threats from North The session will also cover a joint draft resolution for turn- Korea.

A 6-bil.-euro Turnkey Project South Korea and Russia Likely to Vie for Dukovany Nuclear Power Station By Huh Sung-soo

zech energy company CEZ is expected to move ahead Cwith the Dukovany Nuclear Power Station construction project with either Korea Hydro & Nuclear Power or Rosatom of Russia. The Czech government is planning to send an invitation to bid within this year before the bidding scheduled for next year and partner selection in 2022. The total cost of the turnkey project is six billion euros. Atmea, a joint venture between Areva of France and Mit- subishi Heavy Industries of Japan, was recently eliminated in the second round of negotiations. Westinghouse of the United

States, EDF of France and China General Nuclear Power Corp. Dukovany Nuclear Power Station are expected to join the bidding. In the meantime, it was recently reported that Rosatom illegally received bidding-related key 1,000 MW nuclear power plants in Dukovany and Temelin. The information from a CEZ employee and it is said that this can be tenders for the projects and bidder evaluation are around the an advantage for Korea Hydro & Nuclear Power. corner. The groundbreaking is scheduled for 2029 and the proj- The Czech government is planning to build a couple of ects are forecast to be completed in 2036.

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From Negative 1.3% to Negative 1.1% Bank of Korea Raises GDP Growth Forecast By Jung Suk-yee

he Bank of Korea adjusted its South Korean economic Tgrowth forecast for this year from negative 1.3 percent to negative 1.1 percent on Nov. 26. This has to do with the fact that exports are recovering fast despite another spread of COVID-19. At the same time, the central bank froze the key rate at 0.5 percent. Bank of Korea Governor Lee Ju-yeol presides over a Monetary Policy Committee Earlier, in May, the bank lowered the forecast to negative meeting on Nov. 26. 0.2 percent, the first negative figure in 22 years, to reflect the impact of the pandemic. In August, the real GDP growth fore- and 1 percent, respectively. cast was dropped to negative 1.3 percent with things worse than In the meantime, the OECD’s South Korean economic predicted across the world. growth forecast for this year is negative 1 percent, the highest Then, the quarter-on-quarter economic growth rate rebound- in the organization. In the group of G20, South Korea’s figure is ed from negative 3.2 percent to 1.9 percent in Q3 and the bank second only to that of China, 1.8 percent. slightly raised the forecast. Although some anticipated a figure The IMF recently said that South Korea’s GDP would be less than negative 1 percent, the central bank opted to remain the 10th-largest in the world this year. Specifically, its estimate cautious with the number of confirmed infections rapidly rising is US$1,586.8 billion. South Korea came in 12th in 2019. The again. IMF’s South Korean economic growth forecast for this year The central bank’s forecast for next year is 3 percent, raised is negative 1.9 percent, second only to China’s 1.9 percent. Its by 0.2 percentage point from the previous forecast. In addition, South Korean GDP estimate for 2021 is US$1,674.1 billion, the its inflation forecasts for this year and next year are 0.5 percent 10th-largest in the world.

Likely to Rejoin Top 10 South Korea Expected to Rise in Global GDP Rankings This Year

By Jung Suk-yee

he International Monetary Fund (IMF) estimated South TKorea’s 2020 GDP at US$1,586.8 billion in its report published on Nov. 15, saying that South Korea would climb two notches to 10th this year. If so, South Korea will rejoin the top 10 for the first time in two years. It took the 10th place in 2004 and 2005 and remained out of the top 10 until 2017. The IMF’s global growth estimate for this year is negative “South Korea is one of those relatively less affected by 4.4 percent. Specifically, its estimate is negative 12.8 percent the global economic recession triggered by COVID-19 and for Spain, negative 10.6 percent for Italy, negative 10.3 percent Brazil and Russia are predicted to come in 12th and 11th this for India, negative 9.8 percent for France, negative 6 percent year, respectively,” the IMF said, adding, “South Korea’s 2021 for Germany, negative 5.3 percent for Japan and negative 4.3 GDP and ranking are estimated at US$1,674.1 billion and 10th, percent for the United States. Its estimates for China and South respectively.” Korea are 1.9 percent and negative 1.9 percent, respectively.

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Minimum Wage Hike Is One Major Reason FDI in South Korea Decreases for 2 Consecutive Years By Yoon Young-sil

he Federation of Korean Indus- an economy have declined since 2017, Ttries (FKI) recently analyzed when the performance of GM Korea, foreign direct investment (FDI) for the the biggest foreign-invested company in The recent drop in foreign direct investment is attributed to the working hour reduction and minimum wage period starting in 2011 and announced South Korea, began to deteriorate. increase. that the reported FDI continued to Specifically, when it comes to increase until 2018, fell 13.3 percent to exports, the proportion of those companies’ FDI in South Korea showed an US$23.33 billion in 2019 and fell 4.7 panies stood at 17.9 percent in January increase of 321.4 percent and the number percent year on year to US$12.85 billion to July this year after having hit an all- of Chinese companies in South Korea in the first three quarters of this year. time high of 20.2 percent in 2013. Like- increased 51 percent from 2011 to 2018. “The recent decrease has to do with wise, their contribution to employment In contrast, Japanese companies’ con- the revocation of the corporate tax cut for fell from 6.2 percent to 5.5 percent from tribution has dropped since 2013. Spe- FDI makers, investment contraction attrib- 2011 to 2019. Their sales and corporate cifically, their FDI dropped 68.5 percent utable to COVID-19 and the working hour tax contributions decreased from 14.7 from 2012 to 2019 and the number of reduction and minimum wage increase percent to 12 percent from 2011 to 2019 Japanese FDI makers in South Korea fell that have continued under the current and from 20.2 percent to 14.4 percent 11.1 percent from 2013 to 2018. administration,” the federation explained. from 2011 to 2018, respectively. “In the third quarter of this year, the According to the FKI, FDI mak- On the other hand, U.S. compa- FDI hit an all-time Q3 high of US$5.23 ers, that is, foreign-invested companies nies’ contribution to the South Korean billion after investment projects delayed accounted for approximately 15 percent economy is continuing to increase. Last due to COVID-19 were resumed,” the of the total domestic sales, 20 percent of year, their FDI jumped 188.5 percent as FKI said, adding, “The South Korean the total exports, 6 percent of the total compared with 2011 and they invested government is improving investment employment and 20 percent of the total US$140 million in semiconductor equip- environments with various incentives and corporate tax back in 2011. However, ment R&D and US$160 million in anti- law revisions and this is expected to have those contributions to the South Kore- cancer drug development. Chinese com- positive effects for the time being.”

First Time since September 2018 South Korea’s Current Account Surplus Tops US$10 Billion in September By Jung Suk-yee

he Bank of Korea announced on automobile exports jumped 12.4 percent, South Korea’s current account surplus totaled Nov. 5 that South Korea’s current 16 percent and 24.3 percent, respectively. US$10.21 billion in September this year, the first time to T exceed US$10 billion since September 2018. account surplus totaled US$10.21 billion in The monthly imports rose 1 percent year September this year to exceed US$10 bil- on year to US$37.83 billion. Above all, that of outbound. The transport account lion for the first time since September 2018. both exports and imports, which never surplus was US$280 million. South Korea posted a current account increased after the outbreak of COVID- The primary income account dropped deficit of US$3.33 billion in April in 19, simultaneously increased for the first to US$610 million due to a dividend the wake of COVID-19. However, it time in seven months. income deficit of US$160 million. The remained in the black in the subsequent The service account deficit, in the dividend income decreased with overseas five-month period. meantime, reached US$2.04 billion, South Korean corporations having diffi- In September, the increase in surplus down approximately 10 percent from a culties whereas foreigners received more was led by exports, which increased 8 year ago. The travel account deficit fell dividends from South Korean IT compa- percent year on year to US$49.85 billion. to US$430 million with the number of nies. Net foreign financial assets showed Semiconductor, chemical product and inbound travelers decreasing along with an increase of US$8.91 billion.

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Fiscal Deficit Ballooning South Korean Government’s Debt Soaring By Jung Suk-yee

he Ministry of Economy and Finance announced on TNov. 10 that the South Korean government’s total revenue and expenditure were 354.4 trillion won and 434.8 trillion won in the first three quarters of this year, respectively. The former decreased 5.1 trillion won year on year, the latter increased 48.8 trillion won from a year ago, the government’s overall fiscal deficit amounted to 80.5 trillion won, and its social security fund-excluded fiscal deficit amounted to 108.4 trillion won, almost 200 percent of last year’s figure. The most worrying part is the national tax revenue, which decreased by 13.4 trillion won year on year to 214.7 trillion won. Specifically, the corporate tax revenue dropped 15.8 trillion won to 50 trillion won and the value added tax revenue The Korean government's fiscal deficit amounted to 108.4 trillion won in the first three decreased 4.3 trillion won to 47.7 trillion won while the income quarters of this year, almost 200 percent of last year’s figure. tax revenue edged up 4.4 trillion won to 65.1 trillion won. The ratio of collected taxes to the target revenue stood at 76.8 of COVID-19. As a result, the government debt jumped from percent, down 0.9 percentage point from a year earlier. Under the 699 trillion won to 800.3 trillion won in nine months. The gov- circumstances, a tax revenue deficit appears to be imminent. ernment is estimating this year’s fiscal deficit and government This year, the government spending has soared in the wake debt at 118.6 trillion won and 846.9 trillion won, respectively.

People Investing in Stocks with Borrowed Money Household Credit at Record High By Jung Suk-yee

he Bank of Korea announced on Nov. 24 that the total Thousehold credit hit an all-time high of 1,682.1 trillion won at the end of the third quarter. This has to do with an increase in the number of those investing in stocks with borrowed money and an increase in home-backed loans. The household credit increased 44.9 trillion won in the third quarter whereas the amount of increase was 25.8 trillion won in the second quarter. Household loans, which account for most of the credit, increased 39.5 trillion won to 1,585.5 trillion won in the third quarter. The amount of increase hit a 15-quarter high. This is because home-backed loans increased faster and other loans showed the most rapid increase in history. An electronic board shows KOSPI topped 2,610 points during the Nov. 24 trading Home-backed loans rose 17.4 trillion won to 890.4 trillion session. won with 309,000 houses bought and sold. In the previous quarter, the figures were 14.8 trillion won and 296,000. Those other Credit card payments to be made showed the highest rate of loans, most of which are credit loans, increased 22.1 trillion increase ever, too. Specifically, the amount increased 5.4 trillion won to 695.2 trillion won with some of the loans used for hous- won to 96.6 trillion won. Previously, it decreased 6.1 trillion ing-related purposes and more and more people investing in won in the wake of COVID-19 in the first quarter and rebound- stocks with credit loans. ed in the second quarter.

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A Positive Step in the Right Direction South Korea Declares Carbon Neutrality by 2050 By Jung Suk-yee

outh Korean President Moon Jae-in declared on Oct. 28 that South Korea Swould achieve carbon neutrality by 2050 by actively responding to global climate change together with the international community. The concept of carbon neutrality can be defined as zero net greenhouse gas emissions. It can be reached by minimizing greenhouse gas emissions and absorbing emit- ted greenhouse gas. Carbon neutrality is now a worldwide trend. More than 70 countries across the world already made the same declaration, including 65 that did so at the U.N. Climate Action Summit in September last year. Both China and Japan followed suit after the summit. At present, South Korea’s annual carbon dioxide emissions are 727.6 million tons, the seventh-largest in the world.

South Korea has declared plans to achieve carbon The international community welcomed the declaration of the South Korean neutrality by 2050. government. “The United Nations is very encouraged by President Moon Jae-in’s announcement of the Republic of Korea’s commitment to get to net zero emissions by 2050. This is a very positive step in the right direction after Korea’s exemplary Green New Deal which was announced in July,” said U.N. Spokesperson Stephane Dujarric, adding, “The United Nations now looks forward to the concrete policy measures that will be proposed and implemented to reach this goal.”

Aims to Attain Carbon Neutrality by 2050 South Korea to Reduce Coal-fired Power Generation to Zero by 2050 By Huh Sung-soo

South Korea plans to reduce the ratio of coal-fired The Ministry of Environment ratios have been adjusted from 4.4 per- power generation to zero by 2050. released a plan on Nov. 19 to reduce cent and 60 percent compared to the the ratio of coal-fired power generation previous plan based on the Low Car- mented as well. to zero and increase the ratio of renew- bon Society Vision Forum. “Every detail of the new plan is able energy-based power generation to The new plan also contains super to be examined for additional carbon 80 percent by 2050 in order to achieve grid construction in Northeast Asia, emissions reduction, rather than a spe- carbon neutrality by that year. The plan more reuse and recycling of resources, cific goal to be met, and we will formu- is scheduled to be submitted to the direct air capture (DAC) technology late specific scenarios down the road in United Nations after public hearings R&D, building design optimization view of policy outcome and technologi- and deliberation at the cabinet meeting based on life cycle assessment, and cal progress,” the ministry explained. scheduled for next month. the development of fully self-driving Still, it is pointed out that the plan is too According to the plan, the South vehicles. The content of the previous optimistic and lacks specific roadmaps Korean government is aiming to plan such as hydrogen-based steelmak- and action plans. At present, both DAC achieve carbon neutrality by 2050 ing and carbon capture, utilization and and CCUS are regarded as impractica- instead of 2062. In addition, the target storage (CCUS) R&D has been supple- ble and unrealistic.

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Regulations Tighter than in Other Countries South Korean Labor Market Far from Flexible By Huh Sung-soo

South Korea is permitted only in 32 non- dom, 16.7 percent of the ordinary hourly manufacturing sectors. wage in the United States, 17.5 percent “In South Korea, dismissal of work- in France, 28.3 percent in Japan and 50 ers is also costly and tightly regulated,” percent in South Korea.” the institute said, adding, “Specifically, The report also pointed out that the the total cost of dismissal of one worker labor cost in South Korea reflecting the is equivalent to his or her wage for 9.6 labor productivity per manufacturing weeks on average in the five countries worker rose 2.5 percent on annual aver- whereas the multiple amounts to 27.4 in age from 2010 to 2018 whereas the cost South Korea is behind advanced countries in terms of labor market flexibility. South Korea.” As for special extended fell 1.5 percent on annual average in the work, the institute pointed out that most five countries. “South Korea has only he Korea Economic Research South Korean companies cannot utilize one type of minimum wage whereas it TInstitute said in its report on Nov. it when they need it because it requires is divided by region in the United States, 19 that South Korea is inferior to the United both the consent of an employee and an by age in the United Kingdom and by States, the United Kingdom, Germany, approval from the Minister of Employ- industry and region in Japan,” the insti- France and Japan in terms of labor cost, ment and Labor. In the five countries, it tute said, continuing, “In France and working hour and employment flexibility. requires either the consent of an employ- Germany, where the minimum wage is According to the report, worker dis- ee or an administrative approval or undivided as in South Korea, the ratio of patch is fully allowed in most industries, requires no particular procedure. those not subject to the minimum wage is including manufacturing, in the five “Overtime pay, holiday work pay higher than in South Korea.” countries and the duration of employ- and night work pay are higher in South In the meantime, the Fraser Institute ment of dispatched workers is unlimited Korea, too,” the report continued to say, said in its recent report that labor market in the United States, the United Kingdom adding, “The additional allowances are regulations in South Korea are tighter than and Japan whereas worker dispatch in zero in Germany and the United King- those in any other OECD member state.

Planning to Check out Progress of Vaccination South Korean Government in No Hurry to Get COVID-19 Vaccines By Huh Sung-soo

he Wall Street Journal reported secured. Ton Nov. 18 that the South According to the Wall Street Journal, Korean government is maintaining a this is because the South Korean govern- Moderna's COVID-19 vaccine prudent approach unlike most other gov- ment is planning to check out the prog- ernments concerning COVID-19 vaccine ress of the vaccination and the coronavi- no mRNA vaccine has been commer- procurement. rus in South Korea has been successfully cially used in history. Meanwhile, Astra- The South Korean government controlled to the extent of hardly affect- Zeneca and Novavax are respectively recently announced that it would pro- ing daily living. working on virus vector and synthetic cure 10 million doses from the COVAX Efficacy and safety are also rea- antigen vaccines and these are expect- Facility and 20 million from global sons why the South Korean government ed to be supplied more smoothly and at pharmaceutical companies. This is much is not in a hurry to sign contracts with lower prices. The current price of the less than what the United States, Japan companies such as Pfizer and Moderna. Pfizer vaccine is US$19.5 and that of the and the European Union have already Their vaccines are mRNA vaccines and Moderna vaccine is US$32 to US$37.

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Semiconductor and Automobile Exports Increase South Korea’s Exports Fall 3.8% in October By Jung Suk-yee

he Korea Customs Service announced on Nov. 16 that TSouth Korea’s exports decreased 3.8 percent to US$44.9 billion year on year in October this year while imports fell 5.6 percent to US$39.1 billion. Its trade surplus continued for six months in a row. Last month, South Korea’s average daily exports hit this year’s high. Specifically, the daily average was US$2.14 billion, up 5.4 percent from a year ago. South Korea’s semiconductor, automobile and wireless communications device exports increased 10.2 percent, 7.1 percent and 5.1 percent in October, respectively. On the other hand, auto parts, petroleum product, ship and consumer electronics exports fell 8.8 percent, 49.8 percent, 19.5 percent and 12.6 percent, respectively. South Korea’s exports decreased 3.8 percent year on year in October. Its exports to the United States rose by 3.3 percent, the European Union by 9.4 percent and Vietnam by 7.2 percent imports fell 33 percent, 24.1 percent and 4.7 percent, respective- whereas those to Japan and the Middle East dropped 18.7 per- ly. The semiconductor imports increased for the fourth consecu- cent and 19.1 percent, respectively. tive month and automobile for the second. The wireless commu- Last month, South Korea’s machinery imports rose 6.2 per- nications device imports increased in seven months. cent and memory chip imports jumped 29.4 percent. In contrast, The unit cost of crude oil import went down 33.3 percent its crude oil, wireless communications device and automobile year on year with international oil prices falling.

37 Import Restrictions Newly Imposed This Year Import Restrictions on South Korean Products on the Increase By Jung Suk-yee

he Korea International Trade Association announced Ton Nov. 1 that South Korean products were subject to 228 import restrictions in 27 countries as of that date and the number of such restrictions increased by 27 in one year. The 228 restrictions are divided into 169 anti-dumping restrictions, 49 safeguards and 10 countervailing duties. Those include 109 on steel and metal products, 47 on chemical, 26 on plastic and rubber, 14 on textile and seven on electrical and electronic. Of the 27 countries, the United States increased the number of its restrictions by eight in one year and India, Thailand and China increased theirs by seven, three and one, respectively. In the first three quarters of this year, a total of 37 import South Korean products are subject to 228 import restrictions in 27 countries. restrictions on South Korean products were newly imposed. The number increased by eight year on year. The new restrictions tions of the United States targeting seamless steel pipes and include three anti-dumping and countervailing duty investiga- thermal printing paper.

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A Threat to Korea-U.S. Economic Alliance Korean and U.S. Business Leaders Call for Revision of Section 232 of U.S. Trade Expansion Act By Jung Suk-yee

usiness leaders of South Korea and the U.S. called for the revision of Section 232 of the United States Trade B The 32nd Korea-U.S. Business Conference is held at the conference center of the Expansion Act at the 32nd general meeting of the Korea-U.S. Federation of Korean Industries in Yeouido, Seoul, on Nov. 17. Business Council on Nov. 17. The meeting was jointly hosted by the Korean Federation take emergency measures, such as restricting imports or impos- of Industries and the U.S. Chamber of Commerce. It was the ing high tariffs on imports, if foreign products are deemed to first gathering of business and political leaders from the two threaten U.S. trade security. Since its introduction in 1962, it countries since the 2020 U.S. presidential election. The theme had virtually not been used but made a comeback as the Donald of the meeting was “Deepening Korea-U.S. trade relations and Trump administration implemented protectionist policies. Based economic growth and innovation." on this clause in 2018, President Trump issued an executive Participants from the Korean side included Byun Jae-il, chair- order imposing 25 percent and 10 percent tariffs on imported man of the Korea-U.S. Parliamentary Forum, Choi Jong-gun, first steel and aluminum products, respectively, and has been pushing vice foreign minister, and Yoon Tae-sik, deputy minister of strategy for tariffs on imported cars. and finance. The U.S. side was represented by Stephen Edward Participants from both countries strongly urged the revision Biegun, U.S. deputy secretary of state, and Cordell Hull, U.S. of Article 232 of the Trade Expansion Act, saying it undermines acting undersecretary for industry and security. Executives from free international trade order and threatens the Korean-U.S. eco- major Korean and U.S. companies, including Samsung Electron- nomic alliance. ics, Hyundai Motor, SK Corp., Amazon and 3M, also attended the "I hope this issue will be resolved in the future as we expect meeting, which was conducted via a video conferencing system. Chuck Grassley, a Republic senator and chairman of the Senate The biggest issue for the business leaders of the two coun- Committee on Finance to push for the revision of Article 232 tries was revising Section 232 of the Trade Expansion Act of aborted in 2019," said Kwon Tae-shin, vice chairman of the the United States. Article 232 allows the U.S. government to Federation of Korean Industries.

Japan’s Consumer Goods Exports to Korea Rebounding South Korea’s Trade Deficit with Japan Rising Again By Jung Suk-yee

outh Korea’s trade deficit with Japan is showing signs of Srising again. Last year, the deficit reached a 16-year low after the Japanese government implemented export restrictions. The Korea International Trade Association recently announced that the deficit added up to US$16.56 billion for South Korea’s trade deficit with Japan shows signs of rising again. the first 10 months of this year. “In that period, South Korea’s exports to Japan fell 13 percent year on year to US$20.63 billion imports from Japan has decreased since July this year. and South Korea’s imports from Japan fell 7.3 percent year on In addition, Japan’s consumer goods exports to South Korea year to US$37.19 billion,” the association explained. are gradually rebounding with boycott campaigns losing steam. It also said that the rate of decrease in South Korea’s exports For example, the sales of Lexus Korea and Toyota Korea jumped to Japan has increased and the rate of decrease in South Korea’s 91 percent and 35.5 percent year on year, respectively.

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Not Willing to Pay Anything to Lone Star South Korean Government Likely to Reject Lone Star’s Offer By Jung Suk-yee

one Star Funds, which is in litigation against the South LKorean government at the International Centre for Set- tlement of Investment Disputes (ICSID), suggested US$870 million as a concession. The total cost of litigation is US$4.7 billion. The offer was made on Nov. 2 and is effective until Nov. 30. Although the South Korean government is about to hold a meeting to discuss the matter, it is unlikely to accept the offer and the legal dispute that started in 2012 is likely to continue until next year. The government’s stance is that it is responsible for nothing and does not have to pay anything to Lone Star Funds. “The fact itself that Lone Star offered the huge discount evidences that its The South Korean government is unlikely to accept Lone Star's recent concession to claims have been groundless from the get-go,” it said. end the investment dispute between the two sides. According to the government, Lone Star will not demand any compensation regarding its failed sale of Korea Exchange Group in 2012.” Bank to HSBC in 2008 if the offer is accepted. “This is another The case is likely to be settled at the arbitral tribunal of the evidence that the government is not responsible,” it said, add- ICSID. The tribunal held an online hearing on Oct. 14 and 15 ing, “In addition, the South Korean government never told Lone and there may be a couple of more hearings before its conclu- Star to lower the price when it sold the bank to Hana Financial sion next year.

Uses Sea of Japan in Some Services in Korea Google Causing Controversy with Place Names

By Kim Eun-jin

ome Google services in South Korea, including weather, Sare using the phrase of Sea of Japan (East Sea) to cause controversy. In principle, Google uses South Korean place names in South Korea and Japanese place names in Japan when it comes to controversial place names. For example, East Sea is shown to Google Map users in South Korea and Sea of Japan is shown to those in Japan. The two are shown at the same time to those in third countries. The phrase, however, is against the very principle, and yet Google is yet to make an official announcement on the matter. In fact, the company has caused the same kind of controversy on Some Google services in South Korea use the phrase of Sea of Japan (East Sea). multiple different occasions. In August this year, Dokdo search on Google Map led to zero results. Last month, People Power Japan with East Sea on maps worldwide. This has to do with the Party lawmaker Jo Myung-hee criticized Google Korea for Sea International Hydrographic Organization’s recent decision to of Japan on Google Earth and Google Korea senior managing use a unique ID number instead of Japan Sea. On maps world- director Im Jae-hyun apologized. wide, the simultaneous use of East Sea and Sea of Japan or In the meantime, civic organizations and the government Japan Sea stood at 2.8 percent in the early 2000s. However, the of South Korea are making continuous efforts to replace Sea of ratio recently reached 41 percent based on such efforts.

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Semiconductor War Global Players Vying for Lead in Chip Market

By Kim Eun-jin

lobal semiconductor companies are increasing their will be in the form of Nvidia shares. investments in M&A and R&D in order to get the The contract is expected to lead Nvidia to get the upper hand Gupper hand in the chip market. According to market on Intel and Samsung Electronics in the future semiconductor research firm IC Insights, this year’s M&A volume in the glob- market by obtaining CPU technology via ARM. Nvidia surpassed al semiconductor industry recently rose to US$72 billion after Intel in market cap in early July this year after posting a record Nvidia acquired ARM for US$40 billion and Intel decided to sell performance in the second quarter. At present, the former’s market its NAND flash memory business to SK hynix for US$9 billion. cap is about 150 percent of the latter’s. In July, Analog Devices acquired Maxim Integrated for over Nvidia is currently leading the global AI ecosystem with US$20 billion. AMD’s acquisition of Xilinx is on the horizon. its GPGPU technology characterized by boosting the capacity The biggest deal in the history of the global semiconductor of processing by means of parallel GPUs. Likewise, ARM has industry was made, which would be enough to bring about a led the global mobile semiconductor market since the advent sea change in the industry. On Sept. 14, U.S.-based GPU giant of smartphones with its low-power chip design capabilities. Nvidia officially announced that it would acquire ARM of the Nvidia now has both CPU and GPU technologies, meaning it United Kingdom, the world's largest semiconductor design com- can become a leader in the era of Industry 4.0. pany, from SoftBank for US$40 billion. The down payment is Nvidia will seek approval from major countries. However, US$2 billion, US$10 billion will be in cash, and US$21.5 billion there are hurdles before the completion of the acquisition. Those

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include antitrust reviews in the United States, Britain, the European Union and China. This is predicted to take a year and a half and will be far from easy. Five years ago, Qualcomm planned to acquire Dutch semiconductor company NXP for US$44 billion but failed to obtain Chi- Nvidia will acquire ARM from SoftBank for US$40 billion. na’s approval. difficult for SMIC to import equipment China Expected to be Hit Hard essential for semiconductor production from US companies such as AMAT, Lam Some analysts predicted that the Brit- Research, and KLA. ish chip designer ARM, which has been In addition, it has become difficult politically neutral, now can be used as to use software, IPs and EDA tools from the United States’ tool for pressure on Cadence, Synopsys and ARM. And, it China. The United States is trying to will likely take a long time for China to keep China in check in the semiconduc- develop its own equipment and software tor industry with its restrictions on Hua- that can replace US technology. wei and its power in the industry can China’s smartphone industry may further increase with Nvidia dominating also collapse if the United States blocks mobile application processor design as Chinese smartphone manufacturers well as GPU. China’s goal to become 70 from using ARM’s application pro- percent self-sufficient in the industry by cessor designs. Samsung Electron- 2025 is likely to take a direct hit. ics, Qualcomm and HiSilicon produce From Sep. 15 onwards, global semi- smartphone application processors from conductor companies cannot supply ARM’s designs. However, Samsung Huawei with semiconductors based on Electronics and Qualcomm produce their U.S. software and equipment. Following own processors by adding their technolo- sanctions upon Huawei, the US govern- gies to the designs whereas HiSilicon, ment on Sep 25 has announced sanctions Huawei’s chip design subsidiary, uses the against Chinese foundry player SMIC, designs as they are. the largest foundry in China, in that Hua- There are also rising chances that the wei may try to procure more from SMIC US government will impose sanctions as an alternative to TSMC. SMIC is cur- on additional Chinese memory makers, rently concentrating on 14-nm processes following SMIC. According to media and planning to introduce 7-nm next year. reports in Taiwan and China in early Actually after the U.S. sanctions, Hua- October, there are rising chances that wei chose SMIC as an alternative chip China’s CXMT and YMTC will become supply source. To support this move, the the next targets of US trade sanctions. Chinese government invested 2.7trillion Chinese memory makers have start- won in SMIC and exempted it from cor- ed mass production in earnest in 2020. porate tax for 15 years. The government DRAM player CXMT currently manu- quickly granted permission to list SMIC factures products based on 19nm pro- on the science and technology innovation cesses with a capacity of 40,000 wpm. board (STAR) of China’s Shanghai Stock The firm plans to start mass production Exchange (SSE), with SMIC securing 7.9 of 17nm products by yearend. Mean- trillion worth of funding via the additional while, in September, NAND player listing. Its plan, however, was thwarted by YMTC held a presentation to launch U.S. restrictions. SSDs using its Xtacking technology. With the series of measures, a hard Xtacking makes peripheral circuits on blow to growth of Chinese semiconduc- a separate wafer and then attaches the tor players is inevitable. For semicon- wafers with memory array via hybrid ductor production, fabless and foundries bonding. YMTC’s capacity has risen are essential. In the future, it will be from 15,000 wpm at the beginning of

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percent of the basic design of global mobile application processors (APs). The M&A deal would not be a good news to competitors such as Samsung Electronics and Intel as Nvidia can wield enormous power in the semiconductor industry in the future. It is pointed out that the deal will adversely affect Samsung Electronics in the long term in the form of a closed patent policy or high patent fees. So far, ARM’s influence in the market has been based on its neutrality, that is, non-intervention in manufacturing. However, its relations with clients such as Samsung, Apple and Qualcomm may change after the acquisition. When ARM was put up for sale, some experts raised the possibility of Samsung Electronics jumping into the takeover Following sanctions upon Huawei, the US government has announced sanctions against Chinese foundry player SMIC, the largest foundry in China on Sep 25. race. The logic was that as Nvidia can be a threat to Samsung by taking over ARM, Samsung would consider acquiring it. How- 2020 to 40,000 wpm. The company also announced 128-layer ever, Samsung Electronics was not very interested in acquir- QLC 3D NAND products in April. ing ARM. Samsung was reportedly concerned about conflicts If mass production and capacity expansions proceed at the between ARM and Samsung’s current businesses. current pace, Chinese memory makers could have a significant A strong opinion inside Samsung was that acquiring ARM impact on global memory supply/demand after 2022. However, would make it difficult for Samsung to attain the Semiconductor if the US government’s sanctions become a reality, they will 2030 vision, which aims to make Samsung the top company in inevitably hurt the future moves of Chinese memory makers that the system semiconductor sector by 2030. "Samsung’s foundry started mass production this year. customers such as Qualcomm still suspect that Samsung may Consequently, China is likely to oppose Nvidia’s acquisi- look into the structure of their semiconductors," an industry tion of ARM as it seeks to retaliate against U.S. export embargo watcher said. "If Samsung acquires ARM, it will lose many of against Huawei. The United Kingdom where ARM is headquar- its foundry customers." tered is reportedly also negative about the M&A deal. ARM’s price was also a problem. In 2019, ARM's sales The United States and China clashed in the past over large- amounted to US$1.9 billion, less than 5 percent of the acquisi- scale semiconductor M&As. In October 2016, Qualcomm, a tion price offered by Nvidia. Some analysts say that Samsung U.S. fabless company, tried to acquire Dutch automotive chip Electronics is in a position different from that of Nvidia, a com- company NXP for $47 billion, but failed due to opposition from pany that specializes in GPUs and desperately needs AP-related China. In November 2017, Singapore's Broadcom was close to technologies. Samsung Electronics produces APs on its own and acquiring Qualcomm for $117 billion in a hostile M&A bid, but has already reached a high technological level. the deal fell through due to opposition from the Committee on Even if Nvidia changes the neutral stance that ARM has Foreign Investment in the United States (CFIUS) under the U.S. maintained towards its customers and raises prices of mobile Treasury Department. AP licenses, it will not have a significant impact, Samsung Elec- Industry watchers say that if ARM becomes a U.S. company tronics explains. "While the cost of licensing basic design of a after it is acquired by Nvidia, ARM may join the U.S. sanctions mobile AP does not account for a large share of the AP produc- against China and not hand over the design of the smartphone tion cost, the price of ARM is US$40 billion, too high to make application processors (APs) to Chinese companies. Some both ends meet," a Samsung official said. experts point out that Chinese companies may take preemptive It is also pointed out that Nvidia and Samsung Electronics measures to cut ties with ARM. In this case, it is predicted that are now partners after their recent contract for GPU production. Chinese semiconductor manufacturers will use open source In early September, Nvidia unveiled GeForce RTX 30 Series technology such as RISC-V as an alternative. GPUs and announced that those would be produced based solely However, the problem is that Chinese fabless companies on Samsung Electronics’ 8-nm foundry process. This surprised have a low technological level. Huawei's semiconductor design many because 20-year partner TSMC was excluded. “Although subsidiary HiSilicon has also been making Kirin chips based on Samsung Electronics and Nvidia compete in the industry, they ARM's design. "It seems very difficult for Chinese companies also have common interests, which implies that they are likely to to make their own high-performance APs without ARM's design compete and cooperate at the same time as Apple and Samsung technology," an industry analyst said. Electronics do in the smartphone market,” said an industry expert.

Why Was Samsung Not Interested Foundry Competition Getting Fierce in Taking over ARM? In stead, Samsung Electronics is in hot pursuit of TSMC, ARM is a fabless company that accounts for more than 90 making fast moves towards micro-fabrication processes.

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Although Samsung Electronics was ahead of TSMC in mass- technology leadership by increasing facility investment. The producing EUV-based 7-nm semiconductors, there are still wide company’s facility investment grew from US$10.5 billion in gaps between the two in other sectors. 2018 to US$14.9 billion in 2019 and is expected to reach US$17 Although Samsung Electronics' foundry business division billion in 2020. Earlier 1n 2019, TSMC said that it will be pos- is known to be slightly ahead of TSMC in introducing extreme sible to mass-produce 2-nano products by 2024 by investing ultraviolet (EUV) lithography, industry insiders believe that US$6.5 billion in R&D. TSMC also swept away the extreme there is still a technology gap with TSMC. TSMC recorded ultraviolet (EUV) lithography equipment that the world’s sole US$3,338 in sales per wafer in 2019, higher than Samsung EUV provider ASML shipped in 2019. Electronics’ US$2,490, which means that it is more profitable TSMC's aggressive investments are a response to the rapid than Samsung, said market research firm The Information Net- growth of the foundry market. Market research firm TrendForce work. Samsung Electronics is ahead of other foundry compa- predicted on Nov. 19 that global foundry sales will increase nies, including UMC (US$1,620), Global Foundry (US$1,680), 23.8 percent in 2020 from the previous year. This is the highest and SMIC (US$1,560). growth in the last 10 years. The foundry market is expected to Although Samsung Electronics’ main production line is a top US$80 billion in 2020. Other market research companies 5-nm process like TSMC, the world’s largest foundry maker also predicted growth of the foundry market. Omdia predicted is also one step ahead in terms of semiconductor integration, that sales in the global foundry market will increase 13.5 per- not semiconductor circuit width. Samsung Electronics' 7-nm cent from US$60 billion in 2019 to US$68.2 billion in 2020. EUV product's transistor concentration stands at 95.3 MTr per It also predicted that foundry sales will continue to grow to square millimeter, according to Tech Centurion, a semiconduc- US$73.8 billion in 2021, US$80.5 billion in 2022, US$87.3 bil- tor performance review site. TSMC's 7-nm EUV products have lion in 2023, and US$94.4 billion in 2024. a higher transistor concentration of 115.8. In terms of 10-nm Taiwan's TSMC topped the global foundry market with a processes, the transistor concentration of Samsung chips hit 53 percent share in the second quarter of 2020, followed by 51.8, lower than TSMC’s 60.3. Samsung Electronics (19 percent), GlobalFoundries (8 percent), In particular, the transistor concentration of Intel's 10-nm UMC (8 percent), and SMIC (5 percent). In the third quarter process-based products recorded 100.8. Intel is one generation of 2020, Samsung’s foundry market share fell 1.4 percentage behind Samsung Electronics in terms of circuit width technol- points to 17.4 percent in the third quarter of 2020, while that of ogy but far ahead of Samsung in terms of transistor concentra- TSMC rose 2.4 percentage points to 53.9 percent, TrendForce tion. Therefore, experts say that Samsung Electronics can catch said. While TSMC secured diverse customer groups such as up with TSMC only if it upgrades its performance in transistor Apple, AMD, and NVIDIA, Samsung Electronics' foundry divi- integration. sion has a high proportion of sales related to the company’s The gaps accelerates Samsung Electronics to step up its System LSI Division which designs its mobile application pro- efforts into upgrading its micro-fabrication and packaging tech- cessor (AP) Exynos. nologies to narrow its gap with TSMC. Particularly, Samsung Samsung Electronics' market share uptrend also prompted is trying to apply the so-called Gate All Around (GAA) process TSMC to pursue a super-gap strategy. In 2017, TSMC's share that increases contacts between transistors and gates, and the was 50.4 percent, while that of Samsung Electronics a mere 6.7 Multi-Bridge Channel (MBC) Fet process. In fact, on Aug. 13, percent, according to Omdia. But Samsung Electronics' foundry Samsung Electronics developed and introduced the industry's business division increased its presence significantly for the past first three-dimensional stacking technology that stacks chips three years. produced through a 7-nm EUV (Extreme Ultraviolet) process In particular, Samsung mass-produced 7-nm semiconduc- several times to make a single semiconductor. tors based on an EUV process for the first time in the industry Under these circumstances, TSMC is seeking to cement its in 2019. At the time, TSMC responded by mass-producing 7-nm products using ArF exposure equipment and multi-patterning technology. But its position as a leading chipmaker was shaken as the circuit visibility of its products was lower than that of Samsung products. Consequently, securing EUV equipment is the most urgent task for Samsung Electronics. If the installation of EUV equipment is delayed, orders from global customers who want to receive the most advanced high-performance and low-power semiconductors will go to TSMC. For this reason, Samsung vice chairman Lee Jae-yong fly to the Netherlands to meet with ASML CEO Peter Wennink and CTO Martin van den Brink of ASML at the Dutch company’s main office in Eindhoven on TSMC and Samsung Electronics have a two-runner race in the under-10-nm chip market. Oct. 13 (local time). Vice chairman Lee was pressing the top

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transaction includes Intel’s Non-volatile Memory Solutions Group (NSG) such as NAND SSD business, NAND component and wafer business, and Dalian NAND memory manufacturing facility in China, but Intel will retain its Intel® Optane™ business and intends to invest transaction proceeds in long-term growth priorities. SK hynix said the deal is aimed at enhancing the competitiveness of its NAND flash solutions and growing the memory ecosystem. The world's second-largest DRAM producer has a somewhat unbalanced business structure, with DRAMs accounting for 72 percent of its sales as of the second quarter of this Samsung Electronics vice chairman Lee Jae-yong (second from right) observes year but NANDs only 24 percent. For this reason, its biggest high-end EUV equipment during a visit to Dutch semiconductor equipment company weakness is that its profits fluctuate whenever DRAM prices go ASML on Oct. 13 (local time). up and down. executives of ASML for early delivery of EUV lithography To address this problem, SK hynix acquired the Memo- equipment that Samsung has agreed to purchase this year. ry PCIe Card Division from Violin, a U.S. company, and the Samsung Electronics has introduced 10 pieces of EUV Firmware Division from Softq Development FLLC in Eastern equipment and purchased about 20 more pieces at the begin- Europe in 2014 and invested in Toshiba (now known as Kioxia) ning of 2020. TSMC currently operates 20-plus pieces of EUV in 2017. equipment and announced that it will purchase 60 more pieces By taking over Intel's NAND business, SK Hynix’s share of EUV equipment by 2022. of DRAM business will decrease to 60 percent while that of the TSMC and Samsung Electronics have a two-runner race in NAND business will increase to 40 percent. the under-10-nm chip market. The two chipmakers have reached Samsung Electronics ranked first in the NAND market with their full wafer production capacity in the sub-10-nm product a 33.8 percent share in the second quarter of this year, followed segment, TrendForce said. by Kioxia (17.3 percent) and Western Digital (15 percent), mar- TSMC is making application processors (APs) for the ket research firm Omdia says. Intel (11.5 percent) and SK hynix iPhone 12 series using a 5-nm process. The Taiwanese chipmak- (11.4 percent) took fourth and fifth place. er is expected to produce the latest semiconductors for MediaT- When SK hynix completes its acquisition of Intel, its share ech, NVIDIA, and Qualcomm starting in 2021. of the NAND market will exceed 20 percent, making it the sec- Samsung Electronics is likely to use 5-nano technology to ond-largest after Samsung. In particular, SK hynix will be able produce NVIDIA's next-generation GPUs and Qualcomm's APs, to surpass Samsung in the enterprise solid state drive (SSD) but Samsung’s 5-nm chip production is expected to be only 20 market where Intel has a strength. Intel ranked second with 29.6 percent of TSMC's, TrendForce said. Some point out that the percent and SK hynix fifth with 7.1 percent in the enterprise transistor concentration of TSMC semiconductors is more than SSD market in the second quarter of this year. The combined 10 percent higher than that of Samsung Electronics' products. market share of the two chipmakers will hit 36.7 percent, sur- Samsung Electronics is planning to mass-produce 5-nm passing 34.1 percent of Samsung Electronics, the current num- semiconductors in the second half of 2020. It has recently start- ber one player. ed developing a 4-nm process to narrow its gap with TSMC. It In particular, Intel possesses industry-leading NAND SSD is also planning to have a clear edge over TSMC by applying technology and quadruple level cell (QLC) NAND flash prod- the multi-bridge channel (MBC) FET process, which is Sam- ucts. For the first six months ended June 27, 2020, the NAND sung's proprietary technology, starting from a 3-nm process. businesses represented approximately US$2.8 billion of the rev- Both Samsung Electronics and TSMC announced that they will enue for Intel`s Non-volatile Memory Solutions Group (NSG) mass-produce 3-nm products in 2022. and contributed approximately US $600 million to NSG operat- Samsung Electronics is expected to focus most of its semi- ing income. conductor facility investments on foundry in 2020. If Samsung SK hynix developed the world’s first Charge Trap Flash Electronics executes about 20 trillion won in facility investments (CTF)-based, 96-layer 4D NAND flash in 2018 and 128-layer alone in the foundry sector in 2020, it will make investments 4D NAND flash in 2019. SK hynix will combine Intel`s solu- similar to those of TSMC (US$17 billion). This will enable Sam- tions technology and manufacturing capability in order to estab- sung Electronics to narrow its market share gap with TSMC. lish a higher value-added 3D NAND solutions portfolio including enterprise SSDs. SK hynix Acquiring Intel NAND Business The SSD market is expected to grow at an annual average rate of 18 percent from 2019 to 2024. The enterprise SSD mar- SK hynix announced on Oct. 20 that it will acquire Intel's ket is forecast to grow at an average annual rate of 23.9 percent, NAND memory and storage business for US$9 billion. The driving the growth of the overall SSD market. Industry insiders

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believe that the market for server stor- ed human resources as well as intellec- ages where SSDs are used will double in tual property rights. Analysts expect SK size in 2024 compared with 2019. hynix to make a big investment in the SK hynix has laid out a plan to more Dalian plant and expand its workforce. than triple its NAND sales to 15 trillion SK Hynix is starting to take steps to won within five years based on its acqui- reinforce its foundry business in China sition of Intel's NAND business. The after acquiring Intel's NAND flash busi- company's CEO Lee Seok-hee presented ness. SK Hynix System IC, a subsid- the new vision at a conference call held iary of SK Hynix that specializes in the SK hynix will acquire the entire NAND flash business of on Nov. 4 to announce its earnings for U.S. semiconductor company Intel for US$9 billion. foundry business, has sold all of its semi- the third quarter. SK hynix's NAND sales in conductor production equipment at its plant 2019 amounted to US$4.55 billion. in Cheongju, North Chungcheong Province, to a joint venture On the other hand, Intel has completely reorganized its in Wuxi, China. The relocation of the production equipment is business structure to become a non-memory company. Intel seen as a strategic move to further expand its presence in the is planning to invest its financial resources that will be gained Chinese foundry market amid the U.S.-China trade dispute. through this deal in future growth engine areas such as artificial SK hynix’s sales generated in China rose from 33.4 percent intelligence (AI), 5G networking, and the intelligent, autono- of the company’s total sales in 2017 to 46.4 percent in 2019. As mous edge. Intel will, however, continue to manufacture NAND the company’s reliance on China is growing, it is expected to wafers at the Dalian Memory Manufacturing Facility and retain dial up its investment in the Dalian plant. all IP related to the manufacture and design of NAND flash wafers until the final closing. Competition for Top Spot in Global Chip Market SK hynix and Intel will endeavor to obtain required gov- ernmental approvals expected in late 2021. Following receipt Sales of the top 15 semiconductor companies worldwide are of these approvals, SK hynix will acquire from Intel the NAND expected to increase 13 percent in 2020 from a year earlier. Intel is SSD business (including NAND SSD-associated IP and expected to maintain its No. 1 position, while Samsung Electron- employees), as well as the Dalian facility, with the first payment ics is expected to take second place and SK Hynix fourth place. of US$7 billion. These forecasts are from a report released by market SK hynix will acquire from Intel the remaining assets, research firm IC Insights on Nov. 24. The report estimated sales including IP related to the manufacture and design of NAND of the top 15 companies at US$355.4 billion in 2020. In 2019, flash wafers, R&D employees, and the Dalian fab workforce, their sales dropped 15 percent on year. upon a final closing, expected to occur in March 2025 with the Intel is likely to maintain its No. 1 position in semiconductor remaining payment of US$2 billion. sales. IC Insights expects Intel's sales to grow 4 percent on year Intel and SK hynix will work collaboratively to better serve to US$73.9 billion in 2020. Samsung Electronics is expected the growing demand from the memory-based semiconductor to grab second place with US$60.5 billion, up 9 percent from a ecosystem as they did recently with DDR5. year earlier. “I am pleased to see SK hynix and Intel`s NAND division, Taiwan's TSMC is expected to rank third with US$45.4 which have led the NAND flash technology innovation, work billion, up 31 percent from the previous year. IC Insights said to build the new future together,” said Lee Seok-hee, chief TSMC's sales of application processors (APs) to Apple and executive officer (CEO) of SK hynix. “By taking each other`s HiSilicon soared. strengths and technologies, SK hynix will proactively respond SK Hynix is expected to place fourth with US$26.5 billion, to various needs from customers and optimize our business up 14 percent from the previous year. It is likely to be followed structure, expanding our innovative portfolio in the NAND by Micron (US$21.7 billion), Qualcomm (US$19.3 billion) and flash market segment, which will be comparable with what we Broadcom (US$17.1 billion). achieved in DRAM.” Taiwan’s fables semiconductor company MediaTek enjoyed Bob Swan, Intel CEO said, “I am proud of the NAND mem- notable sales growth. IC Insights forecasted that the company ory business we have built and believe this combination with SK will post US$10.8 billion in sales, up 35 percent on year, placing hynix will grow the memory ecosystem for the benefit of cus- 11th in the sales ranking, up five notches from 2019. tomers, partners and employees. For Intel, this transaction will Nvidia is expected to come in eighth with sales rising 50 allow us to further prioritize our investments in differentiated percent on year to US$15.9 billion. AMD is also expected to technology where we can play a bigger role in the success of our rank among the top 15 with US$9.5 billion in sales, a year-on- customers and deliver attractive returns to our stockholders.” year increase of 41 percent. Meanwhile, China has welcomed SK hynix’s decision to The industry watchers are paying attention to what will hap- acquire Intel’s NAND business. The transaction includes Intel's pen in the future’s global semiconductor market after the global Dalian NAND Flash plant in China, the SSD business and relat- big M&As and huge investment are made in the industry.

25 Money

Growing No. of Foreigners Buying Property in Capital Area Bill Tabled against Speculative Real Estate Transactions by Non-resident Foreigners By Yoon Young-sil

emocratic Party of Korea lawmaker Jeon Yong-gi Dtabled an amendment to the Local Tax Act on Nov. 8 in order to block speculative real estate transactions by foreigners. According to the amendment, house purchase by a non-resident foreigner is subject to a tax rate of 30 percent plus the current real estate acquisition tax rate. It has been pointed out by many that foreigners’ speculative transactions have led to an overall price increase in the South Korean real estate market. The lawmaker also said that an increasing number of foreigners are buying real estates in the capital and metropolitan areas. According to the Korea Apprais- al Board, they bought 3,930 apartment units last year and 3,825 A ruling party lawmaker has submitted an amendment to the Local Tax Act to block speculative real estate transactions by foreigners. apartment units from January to August this year. In the current law, foreigners are relatively freer than South “A large number of governments, including Singapore, Korean nationals from real estate taxes and loan regulations. Hong Kong, Canada, Australia and New Zealand, are trying to Why the government does nothing about the reverse discrimi- curb speculative transactions by non-resident foreigners with nation has been questioned by an increasing number of market various taxes,” the lawmaker explained, adding, “Similar mea- participants. sures are urgently needed in South Korea.

Banks to Assess Crypto Exchanges' Anti-Money Laundering Systems Survival of Cryptocurrency Exchanges Hinges on Banks By Yoon Young-sil

he Financial Services Commission announced on Nov. T2 an amendment to the enforcement decree of the Act on Reporting and Use of Certain Financial Transaction Informa- tion. The main purpose of the act is to impose the duty of money laundering prevention on virtual asset businesses. According to the amendment, a bank must analyze and assess money laundering risks before giving a real-name deposit and withdrawal account to a virtual asset business. This means virtual asset business in South Korea is now dependent on banks with no legal virtual asset business possible without such an account. The act will be applied to every virtual asset business, that The duty of money laundering prevention will be imposed on virtual asset businesses. is, those engaged in virtual asset purchase and sale, exchange and transfer, storage and management, brokerage, and so on. Security Management System (ISMS) certificate. In addition, The virtual assets that can be handled by such businesses do the account can be provided only after the analysis and assess- not include prepaid cards, mobile vouchers and electronic ment based on its systems and rules. receivables. “Non-bank financial companies will be allowed to share the The amendment stipulates that a virtual asset business can banks’ rights in the future,” the commission explained, adding, be given a real-name bank account only when it keeps customer “The revised ordinance is scheduled to take effect in March next deposits and transaction details separate and has the Information year.”

26 MONEY

U.S. Dollar Demand Continues to Increase Foreign Currency Deposits Hit All-time High By Choi Moon-hee

oreign currency deposits hit an all-time high based on an Fincreasing U.S. dollar demand from both enterprises and individual investors. The Bank of Korea announced on Nov. 18 that residents’ foreign currency deposits in foreign exchange banks increased by US$7.87 billion to US$93.32 billion last month, exceeding US$90 billion for the first time ever. The deposits can be defined as those owned by local individuals and companies, foreigners staying for at least six months in South Korea, and foreign companies doing business in South Korea. Previously, the deposits set new records for three months in a row until August and then decreased US$3.1 billion in Sep- tember. Foreign currency deposits hit an all-time high as U.S. dollar demand from both enterprises and individual investors keeps growing. Those of enterprises increased US$7.2 billion to US$74.73 billion last month. Those of individuals rose US$670 million to “With both exports and imports recovering, enterprises US$18.59 billion. The U.S. dollar deposits increased US$6.85 deposited more money for settlement purposes,” the central billion to US$80.32 billion and the euro deposits showed an bank explained, adding, “In addition, securities companies increase of US$540 million to US$4.4 billion. increased their short-term funds.”

Financing Costs of Enterprises Likely to Go up South Korea’s External Financial Assets Reach New High in Q3 By Yoon Young-sil

he South Korean government is preparing this year’s Tfourth supplementary budget after drawing up a record budget plan for next year and this is significantly affecting the bond market. On Sept. 7, the three-year government bond yield jumped 0.044 percentage point to 0.973 percent. It is 0.178 percentage point higher than this year’s low recorded on Aug. 5. Likewise, the 10-year government bond yield rose from 1.527 percent to 1.572 percent that day and from 1.281 percent to 1.572 percent from July 30 to Sept. 7. The decline in government bond price is because the government has issued a lot of bonds in coping with COVID-19 and South Korea’s external financial assets hit an all-time high of US$1,806.2 billion at the the issuance will reach a new high next year. end of September this year. The government issued 97.1 trillion won of deficit bonds costs on the part of enterprises. The Bank of Korea, in the mean- until this year’s third supplementary budget. The amount will time, is showing no signs of intervention after its purchase of top 100 trillion won for the first time if the fourth supplemen- 1.5 trillion won of government bonds on Aug. 31. The central tary budget, seven trillion won or so, is fully covered by deficit bank is planning to purchase more government bonds in the bonds. Besides, the figure for next year is estimated at 89.7 tril- event of market instability such as a spike in market interest lion won, approximately 2.5 times that of 2019. rates. According to the bank, the current situation is far from This increase in government bond issuance is likely to lead being unstable in view of domestic financial institutions’ and to a rise in market interest rates and an increase in financing foreigners’ demand.

27 MONEY

Due to COVID-19 Major South Korean Banks Remaining Sluggish Abroad By Jung Suk-yee

outh Korean financial holding companies’ overseas Sbusiness is yet to show a meaningful performance, due to COVID-19, in the regions including ASEAN member states. For the first three quarters of this year, KB, Shinhan, Hana and Woori Banks’ overseas business units posted a net profit of 679.1 billion won, 11 percent of the four banks’ combined net profit. The ratio is as high as 50 percent and 90 percent in Citibank and Standard Chartered Bank, respectively. Specifically, the overseas business unit of Hana Bank recorded a net profit of 276.4 billion won, 17 percent of the bank’s profit. Especially, Hana Bank China’s net profit for the three quarters, 86.8 billion won, almost doubled in one year. The net profit of the overseas business unit of Shinhan Bank, Shinhan Bank Vietnam 226.5 billion won, fell 18 percent year on year. Shinhan Bank Vietnam’s profit added up to 91.7 billion won while that of Shin- cent based on the acquisition of Prasac, the largest microfinance han Bank China decreased by approximately 15 billion won. deposit-taking institution in Cambodia. The same business unit In KB, the ratio stood at 5 percent or so although the over- of Woori Bank posted a net profit of 79.6 billion won from Jan- seas business unit of the bank increased its net profit by 170 per- uary to September.

ISS Objects to Worker Director Recommendation at KBFG Worker Director Appointment in the Financial Sector Still Distant By Yoon Young-sil

nstitutional Shareholder Services (ISS) recently released Ia report to object to KB Financial Holdings’ shareholder meeting agenda items for the appointment of two outside directors recommended by the employee stock ownership association of the company. The board of the company is also opposed to the appointment. The agenda items will be covered at the upcoming shareholder meeting. Those in the financial industry are regarding the outside directors as worker directors as unionized KB Financial workers are the backbone of the employee stock ownership association. With ISS objecting to the appointment, the first worker director in the industry has become a distant goal again. This is because ISS is the world’s largest proxy advisory firm account- The employee stock ownership association of KB Financial Holdings holds a press inter- ing for no less than 65 percent of the market and its influence on view regarding outside director recommendation on Oct. 10. foreign shareholders is absolute. Worker directors in financial companies was one of Presi- side director. The National Pension Service supported the union- dent Moon Jae-in’s election pledges. Three years ago, the asso- ized workers and expectations were high for the first worker ciation of KB attempted to have Ha Seung-soo, then co-head of director in the industry. However, the attempt failed due to for- the Solidarity for Proportional Democracy, appointed as an out- eign shareholders’ dissenting votes.

28 MONEY

Large Corporations Lead Profit Recovery Listed Companies’ Net Profits Substantially Increase in Q3 By Choi Moon-hee

orea Exchange and the Korea on Huawei and improved semiconductor Listed companies' operating profit in the third quarter KListed Companies Association industry conditions. When it comes to increased about 50 percent from a year ago. announced on Nov. 18 that 590 KOSPI- sales, Samsung Electronics’ proportion listed companies recorded a combined rose from 11.48 percent to 12.17 per- In the meantime, the Korea Exchange operating profit of 25,628.5 billion won cent from Q3 2019 to Q3 2020. As for and the KOSDAQ Listed Companies in the third quarter of this year, up 48.7 net profit, its proportion edged up 0.04 Association announced the same day percent from a year ago. “Although it is percentage point from 36.48 percent. that 958 KOSDAQ-listed companies true that the profit was too small in Q3 KOSPI-listed companies’ cumulative net increased their consolidated net profit by 2019, the quarterly profit increased by no profit for the first three quarters of this 15.22 percent in one year to 2,235 billion less than 14,134.9 billion won from the year is 51,024.9 billion won, down 9.44 won, operating profit by 45.52 percent to previous quarter and this implies that the percent from a year earlier, and the fig- 3,546.1 billion won and sales by approxi- companies are overcoming the impact of ures are 45,040.9 billion won and down mately 10 percent to 50,674 billion won. COVID-19,” they explained. 20.35 percent when Samsung Electronics “They succeeded in increasing the The profit recovery was led by large is taken out of the calculation. profits and sales at the same time, unlike corporations. In Q3 this year, the net The companies posted a combined KOSPI-listed companies, and this is profits of the top 50 sales companies in operating profit of 36,447.5 billion won because KOSDAQ consists mainly of KOSPI added up to 19,979.9 billion won, in Q3 this year, up 30.94 percent from a companies relatively less affected by 78 percent of the total net profit of KOS- year ago. On the other hand, their sales COVID-19, such as biotech, IT, and PI-listed companies. In Q3 2019, the 50 decreased from 507,759.4 billion won industrial equipment and material,” the companies’ net profit was 12,568.7 bil- to 503,064.7 billion won. Their operat- association explained, adding, “The IT lion won, 73 percent of the total. ing profit-to-sales ratio, which was 5.15 sector’s net profit jumped more than 89 In Q3 this year, Samsung Electron- percent in Q2 this year and 4.68 percent percent and that of IT hardware manufac- ics showed a substantial performance in Q3 last year, rose to 7.25 percent in turers soared over 858 percent in just one improvement based on U.S. restrictions Q3 2020. quarter.”

Cashable Assets Increase Sharply Listed Companies' Free Cash Flow Grows 163% from a Year Ago By Jung Min-hee

arket research firm CEO Score won in insurance, 2,703.9 billion won in announced on Nov. 25 that 259 shipbuilding and machinery and 1,896.8 Major listed companies’ free cash flow (FCF) have M surged 163.1 percent from a year ago. major listed companies’ free cash flow billion won in automobile and auto parts. (FCF) totaled 28,145.4 billion won in the The free cash flow of SK Hynix billion won), Daewoo Shipbuilding & third quarter of this year, up 163.1 per- increased 7,428.3 billion won and those Marine Engineering (2,453.5 billion cent from a year ago. of Samsung Electronics, LG Chem, won), Samsung Card (1,779 billion won) IT, electrical and electronics compa- Mirae Asset Daewoo and Hyundai Motor and NH Investment & Securities (1,561.3 nies’ free cash flow increased by 13,186 increased 3,988.9 billion won, 3,334.9 billion won). billion won, followed by petrochemi- billion won, 2,049.5 billion won and Those companies’ cashable assets cal (5,530.2 billion won) and securities 1,081 billion won, respectively. On the increased a lot as well. At the end of the (3,910.4 billion won). A total of 13 out of other hand, it decreased in 116 compa- third quarter, their cashable assets added 22 sectors showed an increase whereas nies, including Samsung Life Insurance up to 88,763.3 billion won, up 32.3 per- the cash flow decreased 5,945.6 billion (4,899 billion won), Kia Motors (2,721.9 cent from a year earlier.

29 MONEY

Shareholder-friendly Management Listed Companies Increasing Dividends By Jung Suk-yee

business management becoming increas- lion won. This is approximately 1.4 tril- ingly important worldwide. lion won less than the estimate at the The Korea Exchange announced on beginning of this year but about 900 bil- Nov. 24 that 1,085 KOSPI- and KOS- lion won greater than that at the end of DAQ-listed companies paid 22.4 trillion August this year. The cash dividend-to- won in year-end dividends last year. For operating profit ratio is expected to hit an reference, the amount was 23.2 trillion all-time high of 22 percent. won in 2017 and 22.8 trillion won in This is a significant increase in that Listed companies are planning to increase their dividend payments to become friendlier to shareholders. 2018. those companies’ profitability showed a The dividend yield rose on the con- substantial decline due to COVID-19 this isted South Korean companies trary to the amount. Specifically, KOS- year. According to the Korea Exchange, Lare planning to increase their PI-listed companies’ dividend yield rose the combined net profit of 590 listed dividend payments despite COVID-19. from 1.36 percent to 1.93 percent in 2018 companies whose fiscal year ends in This is to become friendlier to sharehold- and then to 2.02 percent last year. December was 51,024.9 billion won in ers with the environmental, social and Those companies’ cash dividends the first three quarters of this year, down corporate governance (ESG) aspects of for this year are estimated at 29.2 tril- 9.44 percent from a year ago.

This Year's High Foreign Investors Net Buy 1.36 Tril. Won of Korean Stock Market Last Month By Yoon Young-sil

he Financial Supervisory Ser- won and 500 billion won and U.S. and Tvice announced on Nov. 9 that Singaporean investors net sold 800 billion foreign investors net bought 1,062 bil- won and 400 billion won, respectively. lion won of KOSPI stocks and 296 bil- At the end of last month, foreign lion won of KOSDAQ stocks last month. investors’ shareholding was 584.8 tril- The combined purchase volume is this lion won, 30.4 percent of the aggregate year’s high. This has to do with the won- value of the South Korean stock market. dollar exchange rate, which dropped The amount fell 13.6 trillion won in one Foreign investors net bought 1.36 trillion won worth of last month, and a recovery of the South month in spite of the net buying because Korean stocks last month. Korean economy. the value of their shares fell. U.S. inves- They showed net selling for five tors accounted for 41.7 percent of the vious month. A decrease in value more months in a row until June in the wake shareholding, followed by European than offset the effect of net buying as in of COVID-19. Although their net buy- (30.1 percent), Asian (13 percent) and the stock market. ing reached 582 billion won in July, their Middle Eastern (3.6 percent). Asian, American and Middle East- net selling continued again in August and In the South Korean bond market, ern investors’ net investments were 400 September. foreign investors’ net buying was 4,089 billion won, 400 billion won and 200 Last month, European investors net billion won, 3,881 billion won of bonds billion won, respectively. On the other bought two trillion won of South Korean were redeemed at maturity and their net hand, European investors recorded a net stocks whereas American, Asian and Mid- investment totaled 208 billion won last disinvestment of 50 billion won. Asian dle Eastern investors net sold 900 billion month. At the end of last month, they investors accounted for 47.1 percent of won, 300 billion won and 200 billion won, owned 150.7 trillion won of bonds in the the bonds held by foreigners, followed respectively. U.K. investors and those in market, 7.4 percent of all listed bonds by European (30.8 percent) and Ameri- the Cayman Islands net bought 1.3 trillion and down 200 billion won from the pre- can (8.2 percent).

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Despite COVID-19 Stock Issuance Likely to Hit All-time High This Year By Jung Suk-yee

orea Exchange announced on KNov. 24 that South Korean companies have issued 13.44 trillion won of shares since the beginning of this year. South Korean companies have issued 13.44 trillion won worth of shares since the beginning of this year. It already exceeded last year’s total, 10,754.8 billion won, and is likely to hit get close to last year’s record high, 55.19 tal increase that is currently underway an all-time high of approximately 19 tril- trillion won. “The financing is mainly amounts to 6,118.8 billion won. This lion won. The current record, 18,206.7 for investment in facilities and M&A to year, it is likely to exceed capital increase billion won, was set in 2017. prepare for the post-COVID-19 era,” HI through third-party allocation for the first With liquidity overflowing, enter- Investment & Securities explained. time ever. prises are issuing bonds and stocks more In the stock market, paid-in capital CB and BW issuance is increasing a and more aggressively. For example, increase involving offering to share- lot as well. This year’s volume already they have issued 51.74 trillion won of holders has led to a substantial increase topped 6.45 trillion won whereas last bonds since the beginning of this year to in stock issuance this year. Such capi- year’s total is less than 5.4 trillion won.

Deposits Top 65 Tril. Won he Korea Financial Investment TAssociation announced on Nov. Investor Deposits in 19 that investor deposits in the stock market increased more than two trillion Stock Market Hit an All-time High won to an all-time high of 65,136 billion won on Nov. 18. By Jung Suk-yee The previous all-time high was on Sept. 4, when the deposits added up to 63,258.1 billion won. For reference, the amount stood at 30 trillion won at the beginning of this year. This means more and more people are preparing to increase their investment in South Kore- an stocks and this has to do with abun- dant market liquidity and increasing expectations for an economic recovery. The deposits increased by no less than 10 trillion won or so this month alone. Specifically, the amount, which was 53,345.2 billion won on Nov. 2, jumped 22 percent in just 15 days. On Nov. 19, KOSPI rose 0.07 percent to close at 2,547.42 points. The all-time high is 2,598.19, which was recorded on The stock market turnover is on a steep upward curve on a liquidity-driven rally. Jan. 29, 2018.

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Institutional Investors’ Share to Be Decreased IPO Stock Allocation for Individual Investors to be Expanded By Jung Suk-yee

and apply equal distribution to at least half of the allocation. According to the plan, the allocation will be increased to up to 30 percent by allowing individual investors’ access to up to 5 percent of the amount not covered by an employee stock ownership association and halving the preferential allocation for high- yield funds from 10 percent. The reduced preferential allocation for such funds is scheduled to remain effective for three years starting from January next year. In addition, the equal distribution will be applied to at least half of IPO shares and the rest will be divided by the current method, that is, in proportion to subscription deposits. The minimum deposit amount will be required in the equal distribution. Some experts are expressing concerns. “The plan is based Financial regulators are planning to increase IPO stock allocation for individual inves- on the popularity of recently listed stocks, and yet the popularity tors from 20 percent to up to 30 percent. cannot last forever, which means a decrease in the popularity of he Financial Services Commission, the Financial Super- new stocks can lead to investment losses and more market vola- Tvisory Service and the Korea Financial Investment Asso- tility,” one of them commented, adding, “Besides, the decrease ciation released a plan on Nov. 18 to increase IPO stock alloca- in institutional investors’ share can lead to more competition and tion for individual investors from 20 percent to up to 30 percent IPO pricing may become more difficult.”

Low U.S. Interest Rates Attracting Korean Investors South Korean Investors Buying More and More Real Estate in the U.S. By Choi Moon-hee

he Wall Street Journal reported on Nov. 17 that South TKorean investors are purchasing more and more commercial real estate properties and warehouses in the United States and its extremely low interest rates are attracting more and more South Korean investors to the market hit hard by the COVID-19 pandemic. According to the report, U.S. real estate investment from South Korea is soaring whereas most global investors are refraining from investing in the U.S. capital market due to the pandemic and Chinese investors’ investment in the market is decreasing due to government control. Commercial real estate research firm Real Capital Analyt- ics’ recent statistics show that South Korea accounted for 3.7 percent of foreign investment in the U.S. commercial real estate South Korean investors are purchasing more and more commercial real estate in the market last year and the ratio jumped to 8.6 percent in the first United States. three quarters of this year, when South Korean investors made a total investment of US$1.56 billion in the market as the third- For reference, the investment from South Korea was US$1.24 largest group behind their Canadian and German counterparts. billion, the 10th-largest, in January to September 2019.

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To Root out Illegal Practices in Stock Market Korea Exchange Cracking Down on Naked Short Selling By Yoon Young-sil

he Market Oversight Com- Tmission of Korea Exchange announced on Oct. 28 that it has initi- Korea Exchange has initiated an inspection with regard to market makers’ compliance with short selling rules. ated a special supervision procedure with regard to market makers’ compliance At present, a total of 12 stock mar- securities companies. The commission with rules related to short selling. ket members and 18 derivatives market is focusing on whether they violated The inspection is a part of the mea- members are domestic market makers uptick rules, whether they conducted sures that the Financial Services Commis- and eight out of the 30 have that position naked short selling, etc. In addition, the sion released on Oct. 19 in order to root in both. They are doing market-making commission is going to look into their out illegalities in the domestic stock mar- activities in relation to 842 stocks and internal control related to short selling, ket. Earlier, it was pointed out that some 206 derivatives. such as borrowing and balance manage- market makers violated the rules and The inspection will cover all the ment and relevant system operation, and committed unfair trading as short sellers. 22 market makers, most of which are observance of borrowing rules.

To Reform Short Selling System Short Sellers’ Participation in Paid-in Capital Increase Likely to Be Limited By Jung Suk-yee

he Financial Services Commis- Tsion is considering limiting short The Financial Services Commission is moving to limit short sellers’ participation in paid-in capital increase. sellers’ participation in paid-in capital increase. ance price. conduct risk-free arbitrage trading. This In most cases, a listed company pur- Short sellers have taken advantage is huge burden on the part of the com- suing a paid-in capital increase sets the of this structure. They borrow and sell a pany because a lower issuance price price of new shares by applying a dis- large number of shares in the price set- leads to a decrease in the scale of capital count rate to the weighted arithmetic ting period to drag down the stock price. increase. mean of the stock price for a certain Then, the new share issuance price falls, The commission is planning to lift its period of time preceding subscription. too. Later, they participate in the capital temporary short selling ban on March 16 In other words, the stock price for the increase, acquire new shares at the low while limiting short sellers’ participation period highly affects the new share issu- price, and repay the shares. In short, they in paid-in capital increase.

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Studying Short Selling Systems in Japan and Taiwan Financial Authorities Considering Expanding Short Selling for Individual Investors By Choi Moon-hee Financial regulators are planning to increase IPO stock allocation for individual investors from 20 percent to up to 30 percent. ith the Financial Services Commission having prom- Wised individual investors’ more participation in short provided for securities companies via Korea Securities Finance selling, Japan’s and Taiwan’s systems are emerging as models Corporation. that can be followed. When an investor takes out a loan with According to the corporation, the number of such stocks shares as collateral in those systems, the collateral shares are increased more than five-fold from 79 to 409 from June 2018 automatically classified as short-sellable. The commission is to March this year. On a balance basis, however, the increment planning to collect individual investors’ opinions on this method. stood at 1.75, from 7.6 billion won to 13.3 billion won. Short selling promotion requires a lot of shares borrowable In Japan, short selling by individual investors is a common at a desired point in time. At present, institutional investors practice unlike in South Korea. In 2017, Japanese individual are sufficiently accessible to a large number of shares by inter- investors’ short selling ratio already amounted to 38.7 percent institution trading. However, the same does not apply to indi- on a value basis whereas that of South Korean individual inves- vidual investors, whose borrowable shares are limited to those tors stood at 5.5 percent.

Lose Money in Foreign Bond and Derivatives Markets Individual Investors Making Profitable Foreign Stock Investment This Year By Yoon Young-sil

he Financial Supervisory Service announced on Oct. T27 that individual investors’ foreign stock investment totaled 28.9 trillion won and the gains from the investment added up to 3.4 trillion won at the end of August this year, the Individual investors earned 3.4 trillion won in gains from foreign stock investment in investment increased 142.6 percent in eight months, and their the first eight months of this year. investment losses in foreign bond and derivatives markets were losses from the investment increased from 800 billion won or so to approximately 3.7 trillion won that day. 2.7 trillion won from the end of last year to August this year. The gains were approximately 100 billion won at the end Their investment in Brazilian government bonds accounted of 2018 and 700 billion won at the end of last year. The figure for no less than 84 percent of the bond investment. “The invest- jumped to 1.4 trillion won in June and 3.4 trillion won in August ment dropped 28 percent in eight months with emerging and this year. For the first eight months of this year, individual inves- oil-producing countries affected by COVID-19 and plunging oil tors’ net foreign stock purchase totaled US$11.5 billion, up 596 prices and the value of the Brazilian Real dropping,” the Finan- percent from a year earlier. Their top picks were Tesla (US$1.55 cial Supervisory Service explained. billion), Apple (US$970 million), Microsoft (US$610 million), When it comes to high-risk derivatives, individual investors’ Google (US$420 million) and Hasbro (US$410 million). losses from foreign exchange-traded derivatives and foreign Meanwhile, their foreign bond investment was 9.3 trillion exchange margin trading were 878.8 billion won and 120.8 bil- won at the end of August, down 27.5 percent from a year ago. The lion won in the first half of this year, respectively.

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To Respond More Flexibly to Exchange Rate Fluctuations NPS to Increase Overseas Investment While Tightly Managing Currency Composition By Yoon Young-sil

he National Pension Service (NPS) great effect on its investment returns. Tannounced that it would more “Examples of the tighter management actively manage the currency composition can include an increase in safe curren- of its overseas assets in order to respond cies such as the U.S. dollar and the Swiss more flexibly to exchange rate fluctua- franc in the event of financial market tions with its overseas investment ratio on instability and a decrease in volatile cur- the increase. This was resolved at its ninth rencies in the case of temporary events Fund Management Committee meeting for such as Brexit,” the NPS explained. this year held in Seoul on Oct. 30. “Our future investment will go to The total pension fund under its man- funds providing their investment details The National Pension Service (NPS) will more actively agement and the ratio are estimated to for hedge fund risk managers as well and manage the currency composition of its overseas assets. exceed 1,000 trillion won and 50 per- this is for more investment opportunities cent in 2024, respectively. This means and higher investment returns,” it went of the NPS is limited to those providing exchange rate fluctuations will have a on to say. At present, the fund investment such specifics for the NPS itself.

Insurers' ROE Plummets by Over 60% for 10 Years Insurers' Profits Way Below Market Expectations By Choi Moon-hee

youp, adding, “Specifically, the ROE of sale means a decrease in future profits life insurance companies dropped from and shows how fragile the current profit 11.3 percent in 2010 to 3.9 percent in structure is.” 2019 and that of non-life insurance com- It was also pointed out that insurance panies dropped from 14.3 percent to 5.5 companies should change their product percent in the same period.” strategy as a decrease in margin is inevi- According to the analyst, the indus- table due to low interest rates. “Variable try needs to almost double its profit. insurance and foreign currency insurance “As compared with the net profits as of need to be expanded and coverage diver- Korean insurance companies' ROE has plummeted by more than 60 percent for 10 years. the end of 2019, life and non-life insur- sification needs to be pursued in a whole ers have to increase theirs 2.1-fold and new framework,” said Mirae Asset Life he Korea Insurance Research 1.5-fold, respectively,” he went on to say, Insurance general manager Oh Eun-sang. TInstitute (KIRI) pointed out in continuing, “This means 4.7 trillion won KB Asset Management general an online seminar on Nov. 16 that the needs to be added to the current profit of manager Kim Hyung-yoon stressed insurance industry’s profit needs to 5.3 trillion won or so.” the importance of alternative invest- reach at least 10 trillion won to meet The analyst also expressed concerns ment. “Alternative investment funds in market expectations with interest rates over some insurers making profits by South Korea grew from 27 trillion won remaining low. The current profit of the trading bonds. “The ratio of gains on to 230 trillion won from 2009 to 2019 industry is approximately five trillion sales of bonds to the net profit as of the and, more recently, overseas alternative won. end of 2019 amounts to 62 percent in life investment funds rapidly expanded to “Insurers’ current net profit is at insurers and 87 percent in non-life insur- account for close to 50 percent of this a 10-year low and has continued to ers, which means they are offsetting their type of investment,” he said, continu- decrease since 2017 and their ROE has business losses with investment returns,” ing, “Although real estate assets’ rates of plummeted by more than 60 percent for he commented, adding, “Although return are forecast to fall, those of infra- 10 years,” said KIRI analyst Noh Geon- some bond sale is necessary, excessive structure are predicted to improve.”

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Growth Streak Extended to 5th Month Korea’s ICT Exports Hit US$16.4 Bil. in October By Kim Eun-jin

he Ministry of Trade, Industry as memories (US$5.43 billion) and system Korea’s ICT exports in October are provisionally esti- Tand Energy said on Nov. 16 that chips (US$2.82 billion) increased evenly. mated at US$16.4 billion. Korea’s ICT exports in October are pro- Computer and peripheral exports percent), those to the European Union visionally estimated at US$16.4 billion. also swelled 5.9 percent. Exports of solid US$1.05 billion (6.5 percent), and those ICT imports were tallied at US$10.22 state drives (SSDs) inflated for 13 con- to Japan US$310 million (9.9 percent). billion, generating a trade surplus of secutive months. ICT exports by small and medium- US$6.18 billion. On the other hand, exports of mobile sized Korean companies amounted to Exports increased 6.0 percent compared phones fell 11.3 percent. Analysts say US$3.88 billion. Their semiconductor to the same month 2019. It marked the fifth that weak demand in the market due to exports stood at US$1.61 billion with a consecutive monthly increase. The average signs of a second surge in COVID-19 7.3 percent increase. Their computer and daily export volume hit US$780 million, up cases affected the size of Korea’s exports. peripheral hit US$15,000 with an 11.5 16.0 percent from October in 2019. By export country, exports to percent increase, indicating that they By item, semiconductor and display China amounted to US$7.44 billion (an put up a relatively good fight in October exports rose 10.1 percent and 10.6 per- increase of 0.7 percent), those to Vietnam compared to the same month of 2019. cent, respectively, leading Korea’s overall US$2.93 billion (28.2 percent), those to But their electric equipment exports slid growth. Exports of semiconductors such the United States US$1.85 billion (8.8 3.6 percent to US$320 million.

Despite U.S. Sanctions against Huawei Korea’s Semiconductor Exports to China Increasing

By Jung Suk-yee

ven after the United States began regulations against Huawei came into Korea's semiconductor exports to China are increasing Eto regulate Korean compa- effect on Sep. 15. However, China’s despite the U.S. sanctions against Huawei. nies’ semiconductor exports to Huawei, demand for semiconductors has been The Korean government is looking Korea's semiconductor exports to China growing as the COVID-19 outbreak has for ways to reduce Korean exporters’ have increased. subsided in China faster than in other growing dependence on the Chinese mar- Korea’s semiconductors exports to regions, and smartphone makers in China ket. In particular, some experts point out China in the first nine months of 2020 other than Huawei have ramped up their that Korea’s high dependence on China stood at US$28.6 billion, a 7.8 per- shares of the Chinese market. is a risk as U.S. President-elect Joe Biden cent increase from a year earlier. China The semiconductor sector is not the is expected to push for cooperation with accounted for 41.57 percent of Korea’s only one that relies heavily on China. allies, forcing Korea to choose between total semiconductor exports, the highest During the same period, Korean petro- the United States and China. since 2016, said the Ministry of Trade, chemical companies depended on China "If Korea takes an ambiguous posi- Industry and Energy and the Korea Inter- for 43.3 percent of their exports, the tion due to its high dependence on China, national Trade Association (KITA) on survey showed. In the case of precision it may face the worst situation where Nov. 9. Korean semiconductor exports to machinery exports, the dependence hit Korea loses trust from both the United China are expected to swell 3.8 percent 63.64 percent. The need to diversify over- States and China," a government official on year in October. seas markets has grown as the U.S.-China said. "Korea needs to address its heavy Samsung Electronics and SK Hynix conflict could negatively affect Korea’s dependence on the Chinese market, but were expected to suffer a drop in exports exports. But Corporate Korea has not it is not easy for Corporate Korea to get to China from October as the Trump been able to break away from its heavy out of the profitable Chinese market right administration's semiconductor export dependence on the Chinese market. away."

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Samsung Building R&D Center in Vietnam Vietnam Requests Samsung to Make Investment in Semiconductors

By Kim Eun-jin

amsung Electronics vice chairman Lee Jae-yong vis- Sited Samsung Electronics Ho Chi Minh City Complex (SEHC) on Oct. 21. SEHC is located in the Saigon High-Tech Park, where Samsung Electronics manufactures consumer elec- Samsung Electronics vice chairman Lee Jae-yong (left) meets with Vietnamese Prime tronics. In 2010, Intel built a semiconductor plant in the park by Minister Nguyen Xuan Phuc in Hanoi on Oct. 20. investing US$1 billion. Approximately 5,000 Intel engineers are engaged in post-processing inspection in the plant. with an external foundry for 7-nm processes and below. Lee visited SEHC after Vietnamese Prime Minister Nguyen The Vietnamese government is working on Plan B after the Xuan Phuc made an investment request. The prime minister announced change in production strategy. This is because the made the request because Intel is currently in dilemma. These packaging and inspection role of the plant of Intel in Vietnam days, the global semiconductor industry is being led by fabless may decrease along with Intel’s in-house chip production vol- and fablite companies such as AMD and Nvidia. Those compa- ume. nies can concentrate their resources on chip design and develop- The prime minister proposed incentives for Samsung Elec- ment as they have no or almost no fabrication facilities. tronic such as designating SEHC as an Export Processing Meanwhile, Intel, an integrated device manufacturer, is hav- Enterprise (EPE). Various tax incentives, including tariff incen- ing a hard time optimizing its microfabrication processes below tives, are provided for EPE companies. Samsung’s current plan the 10-nm level. In the meantime, AMD beat Intel by manufac- is to complete the construction of a 3,000-staff R&D center in turing CPU chips based on TSMC’s 7-nm process technology. Vietnam by 2022 rather than complying with the investment Intel CEO Bob Swan recently said that his company may work request.

A New AP Produced with 5-nm Technology Samsung’s 5-nm Exynos to Go into China's Vivo 5G Phone

By Kim Eun-jin

hinese smartphone maker Vivo's X60, a 5G-capable Cmobile phone that will be released in the first quarter of 2021, will become the first smartphone to run on Samsung Samsung Electronics’ mobile application processor (AP) Exynos Electronics’ 5-nanometer mobile application processor (AP) Exynos1080. the Exynos 980 used for Samsung Electronics' 5G smartphones "The new Vivo smartphone will use Samsung’s Exynos1080 Galaxy A51and A71. produced through a 5-nm process," said Pan Xuebao, execu- Samsung Electronics is focusing on expanding the number tive director of Samsung Electronics' China Semiconductor of Exynos buyers in China. This is because the U.S. sanctions Research Institute, at a Vivo event on Oct. 7. “The Exynos1080 against Huawei are expected to prompt Chinese smartphone earned a higher performance score than Qualcomm's Snap- makers to use APs from external vendors. dragon 865.” Industry insiders believe that Samsung Electronics is offer- The specifications of the Exynos1080 have not been dis- ing more reasonable prices than Qualcomm to win orders from closed, but the new chipset is presumed to be a follow-up to Chinese companies.

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To Start Volume Production in 2021 Samsung, SK hynix All-out to Develop 4th-Generation DRAMs By Michael Herh

amsung Electronics and SK hynix are speeding up Sdevelopment of next-generation DRAMs to be produced with micro-fabrication technology. They are endeavoring to Samsung Electronics and SK hynix are speeding up development of 4th-generation overcome physical limitations by speeding up big data process- DRAMs. ing and reducing chip sizes. Samsung Electronics is planning to bring in EUV lithogra- ment, it is important to secure equipment ahead of competitors. phy equipment in the second half of 2020 to mass-produce 4th- SK hynix is also in the middle of setting up a clean room for generation 10-nm-level (1a) 16Gb DDR5 DRAMs. an EUV line at its M16 plant on Icheon Campus in Gyeonggi In March 2020, the company succeeded in developing 4th- Province. It is planning to finish the construction of the clean generation 10-nano level (1a) DRAM based on EUV lithogra- room by the end of 2020 and bring in EUV equipment for pro- phy. However, it takes more time to mass-produce the product duction of 4th-generation 10-nm DRAMs in 2021. as the company needs to improve production yield and develop SK hynix is aiming to simultaneously develop and mass- production technologies. produce 4th-generation DRAM by 2021, as it succeeded in Samsung Electronics vice chairman Lee Jae-yong recently mass-producing third-generation 10-nm DRAMs in the third flew to the Netherlands to secure EUV equipment. As Dutch quarter of 2020. The chipmaker has already secured part of the company ASML is currently the sole producer of EUV equip- equipment for this purpose.

Chipmakers’ profitability expected to rise The Market for DDR5 DRAM to Grow in Earnest from 2021 By Kim Eun-jin

he market for DDR5 DRAM, which boasts higher Tspeeds and lower power consumption than DDR4 DRAM, is expected to grow in earnest from 2021. Analysts say that DDR5 DRAM is expected to boost the profitability A DDR5 DRAM of memory chipmakers as its unit price is higher than that of DDR4 DRAM. ity is 64 Gb (gigabit), four times the 16Gb of DDR4 DRAMs. Market research firm TrendForce predicted on Nov. 5 that Samsung Electronics and SK Hynix have already finished DDR5’s share of the global PC DRAM market will surge from developing their DDR5 DRAMs and are currently discussing their less than 1 percent in 2020 to 10 percent in 2021. TrendForce supply with major customers such as Intel. SK Hynix officially also said that the share of DDR5 in the server DRAM market released the industry’s first DDR5 DRAMs in early October. will increase from 4 percent in 2020 to 15 percent in 2021. TrendForce said that since memory semiconductor com- DDR5 DRAMs are a next-generation DRAM that has signif- panies have already completed product development, what icantly improved speeds and capacity compared with DDR4 cur- remains is for customers like Intel and AMD to load DDR5 rently used for general purposes. DDR5’s maximum data trans- DRAMs onto their flagship products such as servers and CPUs. mission speed is 6,400 Mbps, twice as fast as 3,200 Mbps of Intel, the biggest customer, is expected to use DDR5 DRAMs DDR4 products. Their operating voltage is 1.1V, about 9 percent for its servers in the second half of 2021, and is expected to lower than 1.2V of DDR4 DRAMs, while their maximum capac- greatly expand use of DDR5 DRAMs in 2022.

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Based on Latest Industry Standards, 3GPP Rel. 16 Samsung and SK Telecom Complete Next-Generation 5G Core Development

By Kim Eun-jin said ParkJong-kwan, vice president and which enables operators to manage their amsung Electronics and SK Tele- head of 5GX Technology Group of SKT. 5G networks more effectively and effi- Scom (SKT) announced on Nov. “We will continue to work closely with ciently. SCP intelligently controls com- 23 that the two companies have success- Samsung to develop breakthrough next- munication of NFs based on traffic status fully developed and trialed the next-gen- generation network technologies to real- and behavior. That is, it allows only nec- eration 5G core network. ize innovative 5G use cases.” essary NFs to communicate with each The next-generation core network “Samsung’s cloud native 5G core other depending on the network traf- enables operators to instantaneously will enable operators to have flexible and fic, thereby saving resources. Samsung install and swiftly deploy customized reliable networks that will play a key role and SKT have successfully completed solutions and services. With this core in delivering a myriad of 5G use cases,” the interoperability trial between SKT’s network solution, operators will be able said Roh Won-il, senior vice president cloud native SCP and Samsung’s cloud to utilize network resources more effec- and global head of Product Strategy, native 5G core, and were able to prove tively. For instance, when the data traffic Networks Business at Samsung Elec- that, with SCP, the communication effi- spikes, the operators will be able to move tronics. “With SKT, Samsung will con- ciency among NFs have improved by capacity to flexibly adapt to the sudden tinue to develop cutting edge technology 30%. changes in their networks. to enable more 5G use cases, as well as Samsung and SKT signed an agree- In addition, the two companies plan bring additional values to our enterprise ment last year to jointly advance 5G and to discover new 5G use cases through customers.” develop for the next-generation commu- the enhanced capabilities to efficiently Samsung’s cloud native 5G core nications. The companies will continue to deploy, provision and activate the new offers modularized and containerized deliver the best class network services to applications. From AR/VR and cloud Network Functions (NFs), enabling new users through collaborative development gaming to autonomous driving and smart services and features to be launched and commercialization of network tech- factory use cases, Samsung and SKT quickly in a commercial network, while nologies, devices, and smart solutions. are building advanced network capabili- reducing the operating costs. By improv- Samsung is a pioneer in the success- ties to enable the delivery of these new ing agility and manageability in the ful delivery of 5G end-to-end solutions immersive capabilities to consumers, and network, new applications can be intro- including chipsets, radios, and core net- increase the accessibility and deployment duced more efficiently. The 5G core work technologies. Samsung has been at ease of 5G for enterprises, with private solution from Samsung allows SKT to the forefront of virtualized core (vCore) 5G networks. upgrade its network more readily, ensur- solution development for 4G and 5G, “The next-generation cloud core net- ing it always has the latest features and starting with the commercialization of work applied with SCP will increase cus- capabilities. 4G vCore in 2015 and 5G NSA vCore tomer benefits through accelerated adop- SKT has developed cloud native in 2018. Samsung is leading the path to tion of 5G-based products and services,” Service Communication Proxy (SCP), commercialization of 5G SA core.

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To Jointly Develop 5G Technologies SK Telecom to Set Up a Joint Venture with Deutsche Telekom By Kim Eun-jin

SK Telecom president Park Jung-ho pose for a photo K Telecom will establish a 5G The two companies will initially after signing a contract with Tim Hottges (second from Stechnology joint venture in Ger- develop 5G indoor repeaters (in-build- left in the top line of the screen), chairman of Deutsche Telekom, to set up a 5G technology joint venture many in partnership with Deutsche Tele- ing solutions). In the mid- to long-term, through a video conference on Nov. 6. kom, a German mobile carrier. It plans they will promote cooperation in app to jointly develop 5G technologies such markets, augmented reality (AR), virtual German cities (Berlin, Hamburg, Bonn, as indoor repeaters to target the global reality (VR), and mobile edge computing Cologne, Munich, Frankfurt, Leipzig, market. (MEC). and Darmstadt) for three months from The joint venture (JV) will be held The global in-building solution mar- August to October in 2020. Based on the fifty-fifty by the two companies, and its ket will grow by 10 percent every year results of the pilot services, an upgraded headquarters will be set up in Germany. to reach about US$10.33 billion by 2023, repeater will be commercialized within The company’s top management will the industry forecast. As there are no the first half of 2021. consist of two co-CEOs and four share- strong players in the 5G repeater mar- SK Telecom will provide about 100 holder representatives, who are business ket yet, the joint venture can establish its technology assets to the joint venture and technology experts from both com- present without much difficulty. and receive royalties in proportion to its panies. It will be officially established The two companies conducted pilot sales. The Korean mobile carrier will be by the end of 2020 with approval from services of 5G/LTE radio frequency able to enjoy dividends based on the joint related organizations. repeaters made in Korea at eight major venture’s business performances.

To Introduce New Offering in Korea SK Telecom Forge Alliance with Amazon By Kim Eun-jin

K Telecom (SKT) has formed a In connection with this business col- SK Telecom has formed a strategic alliance with Amazon to allow Korean customers to purchase prod- Sstrategic alliance with Amazon, laboration, SKT has also entered into an ucts from Amazon through 11st. the world's largest e-commerce company, agreement with Amazon under which the company announced on Nov. 16. Amazon would have an investment right including e-commerce to improve cus- With the collaboration, customers in to acquire a minority interest in 11st tomer convenience and boost overall Korea will be able to buy products from through new preferred shares if certain growth.” Amazon through SKT's e-commerce conditions related to business perfor- 11st said, “Together with Amazon, subsidiary, ‘11st’. This comes as part of mance or an IPO listing event are met. we expect to offer an unrivaled experi- 11st’s efforts to innovate customer expe- Going forward, together with SKT, ence to customers in Korea. Through this rience through cooperation with diverse 11st aims to grow into a global distri- close collaboration, we will make efforts global e-commerce companies. bution hub. 11st will continue to work to provide customers with differentiated With more than 12 years of experi- with global e-commerce companies to benefits soon.” ence in operating one of the largest improve its customer experience and “11st shares our customer obsession online marketplaces in Korea, along with develop greater business opportunities and is one of the leaders in the Korean its potential synergies with SKT, 11st is for Korean sellers. e-commerce space," said an Amazon well-positioned to deliver a differentiated SKT said, “We are pleased to join spokesperson. "Through this upcoming shopping experience. 11st and Amazon hands with Amazon. We will focus collaboration with 11st, Amazon looks will share more details with customers on creating synergies with Amazon forward to providing customers in Korea when the service is ready to be launched. in diverse ICT-related business areas another way to shop Amazon products.”

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1.5 Times Faster than GPUs SK Telecom Unveils AI Chip and New Plans for AI Semiconductor Business By Kim Eun-jin

K Telecom (SKT) unveiled its Sself-developed artificial intelligence (AI) chip named ‘SAPEON X220’ and shared its AI semiconductor business vision on Nov. 25. SAPEON X220 is optimally designed to process artificial intelligence tasks faster, using less power by efficiently processing large amounts of data in parallel. Its deep learning computation speed is 6.7 kilo-frames per second, which is 1.5 times faster than that of graphics processing units (GPUs) for inference that are being widely used by AI-service companies. At the same time, it uses 20% less power than GPU by consuming 60 watts of energy and is SK Telecom's self-developed artificial intelligence (AI) chip named ‘SAPEON X220’ about half the price of a GPU. SKT explained that SAPEON X220 ergies by combining AI semiconductor mance data center applied with AI chip will enable the provision of high-quality chips and 5G edge cloud. The application to AI-based software like content recom- AI services by enhancing the perfor- of an AI chip to a cloud located close to mendation algorithm and APIs. mance of AI data centers through speedy the end users will enable the provision of Meanwhile, SKT is also playing a computation of massive amounts of data. high-quality AI services with ultra-low role in Korea’s efforts to secure differen- From next year, the company will latency regardless of customer device. tiated competitiveness in AI semiconduc- apply SAPEON X220 to its AI service Moreover, the company said that it tor technology. The industry-academia- NUGU to improve the voice recognition will go beyond just providing the AI chip research consortium led by SKT is cur- capability. SAPEON X220 will also be to data centers by actively promoting the rently carrying out a large-scale project utilized by SKT’s affiliate companies. For AI as a Service (AIaaS) business. It will assigned by the Ministry of Science instance, ADT Caps will apply the chip to offer a complete solution package as a and ICT to develop next-generation AI enhance the performance of its AI-based service by combining its AI chip and AI chips and interfaces that can be utilized video monitoring service named T View. software, including diverse AI algorithms for high-performance servers like cloud In addition, SAPEON X220 will be for features like content recommenda- data centers. The consortium members applied to the cloud server of the next- tion, voice recognition, video recognition include SK Hynix, Seoul National Uni- generation media platform of Cast.era, a and media upscaling, along with Appli- versity and Korea Electronics Technol- joint venture of SKT and Sinclair Broad- cation Programming Interfaces (APIs). ogy Institute. SKT brings to the consor- cast Group. For instance, an over-the-top (OTT) tium its capability in AI processor core SKT will also provide the AI chip to service provider wanting to adopt an AI- and is working closely with SK Hynix, enable AI-based projects promoted under based content curation service will be the world's second-largest memory chip- the Korean New Deal Initiative put forth able to easily implement the service by maker, in the area of memory technology by the Korean government. simply using SKT’s solution that comes to promote advancement of AI semicon- The company aims to generate syn- with all that is needed, from high-perfor- ductor technology.

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Under Pressure from the Ruling Party Google Postpones App Fee Adjustment By Kim Eun-jin

oogle announced on Nov. 23 that the implementation Gof its mandatory in-app payment and app fee increase policies has been postponed from January 2021 to September 2021. Two months ago, Google announced that it would make in- app payment mandatory and collect a 30 percent fee from the payment on the Play Store. At present, the policies are limited to game apps. The new policies were planned to be implemented on Jan. 20 on new apps and in September next year on existing apps. Then, the ruling Democratic Party of Korea initiated law revision procedures to block the attempt and the Korea Internet Corporations Association and many other organizations began to put pressure on Google. “The ruling party told that the imple- Google has postponed the implementation of its mandatory in-app payment and app mentation in January would be too hasty and told Google to fee increase policies from January 2021 to September 2021. make a concession,” said an industry source. The postponement has to do with Apple’s recent announce- implemented on Jan. 20 as scheduled. The only two exceptions ment as well. Apple announced on Nov. 18 that it would lower are India and South Korea. In India, the implementation has its fees on non-major developers from 30 percent to 15 percent. been postponed until March 2022 and this is to apply the Indian The mandatory in-app payment in other countries will be government’s unified payment interface.

Anti-fragmentation Agreements Under Scrutiny KFTC About to Finalize Google AFA Investigation By Kim Eun-jin

he Korea Fair Trade Commission (KFTC) is about to Tfinalize its investigation on Google regarding whether it hindered the development and use of operating systems by South Korean smartphone manufacturers. The KFTC sent a notification letter to Google on Nov. 16, is planning to receive a written opinion from Google, and will hold a conference early next year to reach a conclusion. Google has signed anti-fragmentation agreements (AFA) with the manufacturers and the KFTC has looked into the agreements since 2016 to determine whether it can be regarded as market dominance abuse. According to the agreement, no Android smartphone manufacturer can develop or use its own modified Android operating system. Two years ago, the European Union imposed a fine of 4.34 The Korea Fair Trade Commission (KFTC) is about to finalize its investigation into Google's alleged abuse of its market dominance towards Korean mobile phone billion euros on Google with regard to the agreement and pre- manufacturers. loaded Google apps. In the United States, antitrust litigation is underway concerning the same issues. prove this as the operating system launched in 2008 has been Although the KFTC is claiming that Google has increased open-source from the get-go and the free system has attracted its market share by abusing its market dominance, some in the numerous developers and manufacturers enough for a natural industry are pointing out that the commission will be unable to increase in market share.

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Industry's First Rollable Smartphone Chinese Smartphone Maker Unveils a Rollable Phone Ahead of LG Electronics By Kim Eun-jin

n actual rollable smartphone has Abeen unveiled for the first time. But the company was not LG Electron- ics that developed the world's first rollable display. Chinese smartphone maker Oppo was one step ahead in releasing the industry’s first rollable phone. Oppo introduced its rollable smartphone named Oppo X 2021 through the Inno Day 2020 Conference on Nov. 17 (local time). It is a concept phone before commercialization. However, Oppo allowed participants to try out the product and showed off its technical prowess by releasing an operation video on YouTube. The Oppo X 2021 has a 6.7-inch screen that can be expanded to 7.4 inches. If you press a button located on the right side or slightly scan the screen An expected image of a rollable phone from LG Electronics down, the display spreads out. A 'roll motor' with a diameter of 6.8 mm automatically unfolds the display. If you Smartphone industry insiders believe position that it is difficult to officially look at the operation video, you can that Oppo made a surprise announce- confirm the release of a rollable phone, hardly see the wrinkles on the display ment of its rollable phone with the aim its preparations for release are well when it is fully spread. of grabbing the "world's first" title. underway. Industry watchers are fore- LG Electronics released a teaser Oppo intended to show off its innova- casting that the LG rollable phone will video about its rollable phone at the end tive image and technological prowess by make its debut at the Mobile World Con- of its LG Wing event in September. The introducing the prototype first when LG gress to be held in February of 2021. video features a silhouette of a rollable Electronics' rollable phone was about to In this regard, LG Electronics finished phone with a black screen. Its display be released. Although Chinese compa- applying for a patent for technologies spreads to the right side like the Opo X nies such as Xiaomi and TCL have been related to rollable phones to the U.S. 2021. The display panel for both OPPO rushing to introduce their concept prod- Patent and Trademark Office (USPTO) and LG's rollable phones are known to uct images even before commercializing in 2018 and applied for a patent on an be from BOE of China. foldable phones, no such products have expandable phone to the World Intel- Some predict that LG Electron- been actually released. "Details of the lectual Property Organization (WIPO) ics' rollable phones will expand to both Oppo X 2021 and its launch schedule in 2019. On Nov. 2, LG applied to the left and right unlike Oppo's. In fact, LG are not known," said Gizmo China, an Korean Intellectual Property Office for Electronics has applied for various pat- IT media outlet in China. the registration of an LG rollable phone ents related to rollable phones. Although LG Electronics is in a trademark.

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Chinese Brands Stand out Huawei Outclasses Samsung and Apple in Smartphone Camera Performance By Kim Eun-jin

hinese smartphone brands such Pro Max and the iPhone 12 Pro, grabbed Cas Huawei and Xiaomi swept the fourth and fifth place with 130 points top spots in a camera performance test. and 128 points, respectively. The iPhone Huawei's new product Mate 40 Pro 12 Pro Max has the most impressive topped the list with a total score of 136 imaging function among Apple's smart- points, said France's DXOMARK, a phones that have been launched so far, era performance tests, 13 Chinese brands camera and lens evaluation company, on said DXOMARK. But the model scored made the top 20. Not only Huawei and Nov. 15. The Mate 40 Pro received the relatively low in zooming and dynamic Xiaomi, but Vivo, Oppo, OnePlus, and highest score in almost every category, range functions. In addition, Xiaomi's Honor broke into the top 20. Along with including resolutions, dynamic ranges Mi10 Pro tied for fifth place while Vivo's the Galaxy S20 Ultra 5G model, the Gal- (DRs), zooming, and videos, DXO- X50 Pro Plus finished seventh. axy Note 20 Ultra 5G (120 points, 16th MARK said. Among Korean products, Samsung place) and the Galaxy S20 Plus (118 Second place went to the Mi10 Ultra Electronics' Galaxy S20 Ultra 5G model points, 20th place) joined the top 20 club. released by Xiaomi in August, which received the highest score of 126 points. Apple also had three products on its list. scored 133 points. The Mi10 Ultra, a high- Its overall ranking is tied for eighth DXOMARK frequently evaluates the end version of the Mi10 released by Xiao- place with Oppo's X2 Pro. The camera camera performance of the latest smart- mi to mark its 10th anniversary of foun- of the Galaxy S20 Ultra is superior in all phones. It tested more than 3,000 images dation, received high points in zooming, aspects, but its performance in the auto- shot indoors and outdoors, filmed videos exposure and focusing ability. s Huawei's matic focus category is lower than that of for more than 25 hours, and then gave P40 Pro placed third with 132 points. its competitors, DXOMARK said. general points by adding up points in Apple's new models, the iPhone 12 In DXOMARK's smartphone cam- each category.

OLED Display Panels Are Not a Sensitive Item U.S. Approves Samsung Display’s OLED Panel Exports to Huawei By Kim Eun-jin

amsung Display has recently Intel and AMD also announced earlier Sobtained approval from the that they had received permission to sup- Samsung Display has recently obtained U.S. approval United States to supply OLED display ply CPUs for PCs and servers to Huawei. to export OLED display panels for smartphones to Huawei. panels for smartphones to Huawei. TSMC, a Taiwanese foundry company This is the first time a Korean company that has been producing chips designed by Therefore, some analysts say that the has received U.S. approval for exports Huawei, has reportedly resumed supply of export approval system itself is ineffec- to Huawei after the U.S. government some products to Huawei. tive. This is because it is difficult for Hua- imposed tough sanctions on the Chinese An industry analyst said that despite wei to increase orders for display panels tech giant in September. the sanctions, Washington seemed to when it is still having difficulty in secur- Industry insiders believe that Wash- approve exports of non-core items to ing the supply of semiconductors for ington has given permission to Samsung Huawei. Samsung Electronics and SK smartphones. Sales to Huawei accounted Display since OLED display panels can hynix which had supplied semicon- for about 8 percent and 1 percent of total be procured from Chinese companies ductors to Huawei have yet to receive sales of Samsung Display and LG Display, such as BOE. approval. respectively, in 2019.

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Account for 27.3% of the Price Korean Parts Take up Largest Share in Total Price of iPhone 12 By Kim Eun-jin

he proportion of Korean parts of the price, followed by U.S. parts with used in Apple's latest smartphone 25.6 percent, Japanese parts with 13.2 Korean-made parts take up the largest share in T Apple's latest smartphone iPhone 12. iPhone 12 is higher than that of U.S. parts. percent, Taiwanese parts with 12.1 per- The Nihon Keizai Shimbun of Japan cent and Chinese parts with 4.7 percent. play's OLED panel and Samsung Electron- reported on Nov. 21 that a breakdown Compared with the iPhone 11 ics’ flash memories used for the iPhone 12 of the iPhone 12 by Formalhaut Techno released in the fall of 2019, the share were estimated at US$70 and US$19.2, Solutions in Tokyo showed that Korean of Korean parts rose by 9.1 percentage respectively. In addition, the price of parts took up the largest proportion of the points, while that of U.S. and Japanese DRAMs supplied by SK hynix for the iPhone 12 in terms of price. parts fell by 0.2 percentage points and iPhone 12 was estimated at about US$12.8. Korean parts accounted for a high- 0.6 percentage points, respectively. The Japanese company JDI, which had er portion in the iPhone 12 than in the increased dependence on Korean parts supplied displays to Apple, only supplied previous model of the iPhone 11. They was largely due to Korean displays for LCDs for smartphones and failed to sup- overtook U.S. parts and widened their the iPhone 12. ply displays for the iPhone 12 series. The gap with third-ranked Japanese parts. Apple decided to use OLED displays, Japanese economic newspaper noted that According to the report, Formalhaut which offers clearer images, as the dis- Japanese companies such as Sony and Techno Solutions estimated the produc- play of the iPhone 12 and selected Sam- Panasonic were ahead of others in devel- tion cost of the iPhone 12 at US$373. sung Electronics' OLED displays for the oping OLEDs but allowed Korean com- Korean parts accounted for 27.3 percent iPhone 12. The prices of Samsung Dis- panies to dominate the OLED market.

BOE Fails to Meet Apple's Standards Samsung and LG Set to Benefit from BOE’s Drop from Apple’s OLED Panel Supplier List By Kim Eun-jin

hina's display producer BOE has "BOE’s yield has yet to reach a level China's display producer BOE has reportedly failed to qualify as an OLED panel supplier for Apple. Creportedly failed to qualify as an set by Apple," said Kim Ki-hyun, director OLED panel supplier for Apple’s iPhone. of Stone Partners, a market research com- Display will be able to apply it to OLED BOE’s B7 line at Chengdu, Sich- pany. "The OLED panels that will be used panels for smartphones as early as 2021. uan province has failed Apple’s review for for new iPhone products in 2021 have high- BOE lags far behind in LTPO-TFT tech- OLED supply by showing a production er specifications than those for 2020. We nology. In addition, all new iPhone mod- yield of a mere 20 percent. The review was believe the possibility of BOE supplying els to be released in 2021 are expected conducted in September. Earlier this year, OLED panels to Apple is quite slim." to use touch-integrated OLEDs called BOE’s B11 line at Mianyang of the same Two of the four new iPhone models that Y-OCTA, but BOE has no history of province had also failed to meet Apple’s will be introduced in 2021 are expected to mass-producing touch-integrated OLEDs. standards due to a low production yield rate. have OLED panels that use low temperature BOE accounted for 17.1 percent of Even if BOE passes Apple's review poly-crystalline oxide (LTPO)-thin film tran- global OLED sales in the second quarter in the first half of 2021, BOE will be able sistors (TFTs). Samsung Display is likely to of 2020. Yet its share fell to 13.7 percent in to supply OLED panels for refurbished supply these panels. It applied this technol- the third quarter and is likely to further slip iPhone 12 handsets first. This suggests that ogy to display panels for the Galaxy Note 20 to 6.9 percent in the fourth quarter, market only Samsung Display and LG Display are Ultra released in the second half of 2020. research company Omdia forecast. BOE’s likely to participate in production of OLED LG Display is also developing the gap with Korean companies is expected to panels for new iPhone models in 2021. technology. Industry insiders say that LG widen in 2021.

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Yet Struggles in China Market Samsung Reclaims Top Spot in World Smartphone Market By Kim Eun-jin

market. According to Counterpoint Research, Samsung Elec- tronics ranked first in the Indian smartphone market in the third quarter of 2020 with a 24 percent market share, beating Xiaomi (23 percent). However, the Chinese market is still a tough market for Samsung. Huawei accounted for 36.3 percent of the Chinese smartphone market in the third quarter, Sino Research said. Although Huawei’s share dropped from 40.2 percent in the first half of 2020, it maintained its No. 1 ranking. The runner-up is Vivo, who took up 17.5 percent of the total. Oppo (16 percent) came in third, followed by Xiaomi (14.8 percent). Apple placed firth as the only foreign brand with a double-digit market share (10.2 percent). On the other hand, Samsung Electronics' share of the Chinese smartphone market in the third quarter of 2020 is

Korean-made parts take up the largest share in Apple's latest smartphone iPhone 12. only 1.2 percent, down from 1.5 percent at the end of 2019. Samsung’s slump in China can also adversely affect its global market share in the future. According to Strategy Analytics, amsung Electronics regained the top spot in the glob- 5G smartphone shipments are expected to reach 635 million al smartphone market in the third quarter of 2020. units in 2021, accounting for 37 percent of total smartphone SAlthough the Korean smartphone giant did well in sales. It is more than twice 15.4 percent in 2020. most regions, including the Indian market, its slump in the Chi- In particular, nearly half of the world's 5G smartphones are nese market continued. expected to be sold in China. Overseas market research compa- According to Market research company IDC, Samsung nies predict that the proportion of 5G phones sold in China will Electronics accounted for 22.7 percent of the global smartphone increase to 70 percent by the end of 2020. Samsung's position market in the third quarter of 2020 by shipping 80.4 million in North America, Europe, and Southeast Asia is threatened by units, up 2.9 percent from a year earlier. Huawei fell to sec- Apple's launch of the first 5G iPhone, the iPhone 12, and Chi- ond place with shipments plunging 22 percent during the same nese brands such as Xiaomi and Vivo, Oppo and Realmi. Sam- period. Huawei's market share stood at 14.7 percent, down 5.3 sung's global share will inevitably fall if the company continues percentage points from the previous quarter. Xiaomi's shipments to suffer a slump in the Chinese market. increased 42 percent, boosting its market share to 13.1 percent, ahead of Apple's 11.8 percent. Global Smartphone Market Shares in Q3 of 2020 (Source: Counterpoint Research) An earlier survey released by Counter- point Research estimated Samsung’s global market share at 22 percent in the third quarter. Its shipments rose 2 percent on year to 79.8 million units and 47 percent on quarter. It was followed by Huawei (14 percent), Xiaomi (13 percent), Apple (11 percent), Oppo (8 percent), and Vivo (8 percent). LG Electronics held a 2 percent share. Samsung Electronics could recapture the top spot in the third quarter largely thanks to the fall of Huawei and its rise in the Indian

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Apple Likely to Reclaim Top Spot in Q4 Samsung Overtakes Apple as Biggest Smartphone Vendor in the U.S. Market in Q3 By Kim Eun-jin

amsung Electronics overtook Apple in the U.S. smart- Sphone market in the third quarter of 2020. This marked the first time that the Korean smartphone giant beat Apple in a third quarter. It was attributed largely to the delayed launch of Samsung Electronics will supply US$6.64 billion worth of 5G equipment to Verizon of the iPhone 12. the United States. Samsung Electronics sold 10.4 million units, or 33.7 percent Samsung Electronics' smartphone sales in the third quarter of the 30.8 million units sold in the U.S. smartphone market in surpassed 10 million units for the first time since the first quar- the third quarter of 2020, said market research company Strat- ter of 2018. The company released a number of next-genera- egy Analytics (SA) on Nov. 9. Apple came in second with 9.3 tion strategic smartphone models including the Galaxy Note 20 million units (30.2 percent), followed by LG Electronics with series and the Galaxy Z-Flip 5G model in August and the Gal- 4.5 million units (14.7 percent). axy Z-Fold 2 in September. Models that were released one after It was the first time since the second quarter of 2017 that another from April to August, including the A51, the A51 5G and Samsung Electronics became No. 1 in quarterly smartphone the A71 5G, posted steady sales in the July-September period. sales in the United States, a stronghold of Apple. Apple’s deci- Yet it will not be easy for Samsung Electronics to claim first sion to delay the launch of the iPhone 12 to October helped place in t he fourth quarter as sales of the newly released iPhone Samsung Electronics grab the top spot. 12 are rising fast.

TV LCD Panel Prices Rising Korean Display Makers Slowing Down Pace of Withdrawal from LCD Market By Kim Eun-jin

ccording to market research firm WitsView, the Aaverage price of 55-inch 4K LCD panels rose from US$103 to US$155 from January to this month and is expected to move around US$150 to US$160 until the second half of 2021. This year, the average price of 65-inch 4K LCD panels also rose from US$168 to US$207 and those of 32-inch,

43-inch and 50-inch rose as well. An LCD panel from Samsung Display The upward trend is because the global TV sales increased after the outbreak of COVID-19 and Chinese suppliers, which panels in 2021 to concentrate on QD. The company sold its increased their market share to over 50 percent this year, are no LCD panel manufacturing plant in China in August and carried longer selling their products at dumping prices. out downsizing in South Korea. Previously, South Korean display manufacturers gradually According to market research firm Omdia, the two com- reduced their LCD TV panel business to concentrate on next- panies’ combined share in the global LCD TV panel market in generation displays such as OLED and QD-OLED. For exam- terms of shipments fell from 31.2 percent to 16.5 percent from ple, LG Display decided to focus on OLED TV panels and LCD 2018 to the second quarter of this year. Specifically, that of LG panels for use in monitors, tablet PCs and laptops. Samsung Display fell from 17.4 percent to 7.3 percent and that of Sam- Display announced in March that it would stop producing LCD sung Display fell from 13.8 percent to 9.2 percent.

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Samsung Accounts for 33% of Global TV Market Revenue in Q3 Samsung Electronics and LG Electronics Hog Global TV Market By Kim Eun-jin

amsung Electronics posted the highest ever TV market revenue share in the third quarter of 2020. LG Electron- The tiny power inductor developed by Samsung Electro-Mechanics measures 0.8 S mm in width and 0.4 mm in length. ics also finished second with increased sales, beating Chinese companies. with a 16.6 percent market revenue share, beating Sony with 10.1 According to global market research company Omdia, a total of percent and China's TCL and Hisense with 7.3 percent each. 62.87 million TV units, valued at US$28.15 billion, were sold glob- Samsung and LG together accounted for 49.7 percent of the ally in the third quarter of 2020, up 14.7 percent from a year earlier global TV market revenue in the third quarter. in volume terms and an 11.8 percent increase in revenue terms. In terms of sales volume, Samsung Electronics topped the The COVID-19 pandemic fed demand for TVs as people list with a 23.6 percent share, while LG Electronics, which had stayed home due to infection concerns. The pent-up demand fallen to third place in the second quarter, returned to second from those who put off buying TVs in the first half of 2020 also place with 11.6 percent. TCL followed with 10.9 percent and boosted TV sales in the third quarter. HiSense with 9.0 percent. Samsung sold 14.85 million units worth US$9,315.63 mil- In terms of sales quantity, Korean companies took up 35.2 lion in the third quarter, up 39 percent and 22 percent from a percent of the global market, outperforming Chinese companies year earlier in volume and revenue terms, respectively. In par- with 33.8 percent. Korean companies' TV shipments hit an all- ticular, the global TV giant accounted for 33.1 percent of the time high in the third quarter of 2020. global TV market revenue, breaking the previous record of 32.4 Sales of large-screen TVs also increased. Samsung Elec- percent set in the first quarter of 2020. The growth was driven tronics’ revenue share reached 53.5 percent in the market for by its premium QLED TVs. 80-inch or bigger TV models. Sony came in second with 21.5 LG Electronics also fared well. The company ranked second percent and LG with 14.1 percent.

Samsung, LG Preparing to Release Mini- LED TVs in 2021 Mini-LED TV Market Expected to Grow Next Year By Kim Eun-jin

arket research firm Omdia said on Nov. 6 that both MSamsung Electronics and LG Electronics are preparing to release mini-LED TVs next year. Mini-LED TV of TCL The mini-LED TV market is expected to substantially expand next year. According to the firm, the global shipments are present, the LCD TV market remains stagnant and next-gen- estimated to increase 62 percent to 10.3 million units in 2021. eration TVs are yet to become commercially available due to In a mini-LED TV, LEDs with a size of 100 to 200 microm- technological and price factors. Omdia said that the global LCD eters are densely arranged on a backlight unit as a light source. TV shipments would slightly fall to 219,917,000 units next year. Those are different from micro-LEDs in that those emit no light Under the circumstances, TV manufacturers are offering on their own. The dense arrangement leads to a brighter and mini-LED TVs as their alternative to LCD TVs. Chinese com- clearer display and a higher price compared to LCD TVs. panies, including TCL, already released mini-LED TVs this According to those in the industry, mini-LED is a kind of year. The South Korean companies are likely to launch premium transition stage between LCD and next-generation display. At mini-LED TVs based on their advanced technology.

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Surging Interest in Rollable Displays Applications for Patents on Rollable TVs on Sharp Rise

By Kim Eun-jin

atent applications for rollable displays are on Pa sharp rise. The Korean Intellectual Property Office (KIPO) announced on Nov. 16 that patent applications for rollable touch screens surged recently. The number of related patent applications increased to 55 in 2019 from three in 2012 and 15 in 2015. By technological segments, applications for patents on touch sensors totaled 58 (38 percent), taking up the largest share during the 2012 to 2019 period. Those on data processing, including noise removal and the correction of touch data, stood at 39 (25 percent), followed by 26 (17 percent) on interfaces and 15 (10 percent) on housing. Large companies such as Samsung Display and LG Electronics spearheaded the development of rollable technology by accounting for 76 percent of patent applications. They were followed by small and medium-sized enterprises (12 percent) and university Patent applications related to rollable displays are on a sharp rise. research labs (4.5 percent).

Laptop Screen Can be Expanded LG Electronics Registers Patent on Rollable Laptop By Kim Eun-jin

G Electronics, which introduced the world's Lfirst rollable TV costing more than 100 million won per unit in October, has registered a patent on a rollable laptop. LG Electronics registered a 17-inch rollable laptop patent with the Korean Intellectual Property Office on Nov. 19 under the name of a portable electronic device with a rollable display. The laptop screen unveiled in the patent document features a 13.3-inch screen that can expand to 17 inches. The display is unfolded and rolled again in a long bar-shaped case called "housing." This looks like a smaller version of the rollable TV "LG Signature OLED R," which was officially released on Oct. 20. The laptop, like the LG Signature OLED R, can be 13.3 inches or 17 inches as users want. The patent document says the rollable display panel can be bent in an arc form and maintain the shape on its own without additional structures. The laptop’s portability The world's first rollable TV called “LG OLED Signature R” from LG Electronics can be maximized by reducing its size and weight.

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Electrical and Electronics Industry Leads Recovery Overseas Sales of Major Companies Rebound in Q3 By Jung Min-hee

he Federation of Korean Industries announced on Nov. T24 that the top 100 sales companies’ consolidated overseas sales totaled 181.9 trillion won in the third quarter of this year, up 1.6 percent from a year ago. In the second quarter, the consolidated overseas sales dropped 19.5 percent year on year amid a global recession caused by COVID-19. For the first three quarters of this year, the consolidated overseas sales decreased 7.1 percent year on year with the companies’ overall sales falling 3 percent. The Q3 recovery was led by the electrical and electronics industry. The sector’s overseas sales jumped 21.1 percent to 85.4 trillion won as demand increased in North America and Europe and online sales expanded. Consolidated overseas sales of Korea's top 100 companies in the third quarter The automobile and auto parts industry, which posted a increased 1.6 percent from a year ago. decline of 36.5 percent in Q2, reduced the figure to negative 4 percent with North American and European automakers resum- Those companies’ overseas sales in the Americas, Asia and ing their production. On the other hand, energy and chemical Europe rose 13.7 percent, 4.7 percent and 3.4 percent, respec- (negative 14.6 percent) and steel and metal (negative 39.6 per- tively. In the previous quarter, the sales in each of those regions cent) remained sluggish. dropped more than 10 percent year on year.

Combined Investment Increases 8% South Korean Enterprises Maintaining Investment Despite COVID-19 By Jung Min-hee

he Korea Economic Research Institute said on Nov. 11 Tthat the 100 largest South Korean enterprises did not reduce their investments, despite COVID-19, in the first half of this year. According to the institute, the enterprises’ total operating profit was 33.9 trillion won in the first half, down 28.7 percent from a year ago. Meanwhile, their combined investment increased 8 percent to 63.2 trillion won and Samsung Electronics and SK Hynix accounted for 39.6 percent of the total investment. The investment in the telecom, automobile, and electrical and electronics sectors rose 19.6 percent, 11.1 percent and 7.7 percent, respectively. On the other hand, that in food and beverage and logistics dropped 48.9 percent and 56.7 percent, respectively. The institute explained that the South Korean companies The 100 largest South Korean enterprises did not reduce their investments, despite COVID-19, in the first half of this year. have increased their investment in 5G, autonomous driving and semiconductor in particular since the outbreak of COVID-19. and an increase in their cashable assets.” The assets, which were “Those companies’ operating profit-to-investment ratio around 250 trillion won from 2017 to last year, reached 312.6 reached a five-year low of 0.54 in the first half,” the institute trillion won at the end of June this year to show a year-on-year said, adding, “Mounting uncertainties led to more borrowings increase of 19.2 percent.

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Improvement Expected to Continue Next Month Manufacturing Business Conditions Improving

By Jung Min-hee

he Korea Institute for Industrial Economics and Trade Tannounced on Nov. 23 that the professional survey index (PSI) of the manufacturing sector rose from 124 to an all-time high of 133 this month. A total of 173 industry experts participated in the survey from Nov. 11 to 17. In the index, 100 indicates no month-on-month change and a point closer to 200 indicates more improvement. This month’s index indicates that the business conditions of domestic manufacturers have improved for the sixth consecutive month. This month, the domestic demand and export indices rose to 129 and 133, respectively. In addition, the level of production, the level of inventory, profitability and product unit cost reached A survey shows that the business conditions of domestic manufacturers have 123, 104, 105 and 114, respectively. improved for the sixth consecutive month. By industry, the index is 135 in textile, 129 in machinery and 119 in shipbuilding. Also, those of consumer electronics, points in October. chemical and steel rose to 136, 144 and 153. Display (155), As for next month, the overall outlook is 120 and the mobile phone (138) and automobile (139) significantly exceed- domestic demand outlook is 121 with little change. Although the ed the reference point as they did in the previous month. export and production indices are predicted to edge down to 118 However, the index of the semiconductor industry stood at and 111, those of most sectors are forecast to remain over 100 to 92. It rebounded by 32 points this month after a decline of 28 signal improving conditions.

Japanese Automakers’ Sales Recovering Automobile Imports from Japan Soar in October

By Michael Herh

he Ministry of Finance of Japan announced on Nov. 18 Tthat Japan’s exports to and imports from South Korea totaled 416.117 billion yen and 219.771 billion yen last month, up 9 percent and down 19.5 percent from a year ago, respectively. Especially, Japan’s automobile exports to South Korea added up to 1,989 cars last month, up 90.1 percent from a year earlier. Passenger car exports increased 134.5 percent to 1,736 and 5,547 million yen and bus and truck exports dropped 54.2 percent to 314. In South Korea, Japanese automakers’ sales are gradually recovering after the boycott that started in the summer of

2019. For reference, in October 2018, Japan exported 4,337 Japan’s automobile exports to South Korea jumped 90.1 percent in October on year. cars (10.582 billion yen) to South Korea to show a year-on-year increase of 40.9 percent and the cars included 4,092 passenger to the increase were 3.9 percentage points and 3.7 percentage cars with a rate of increase of 37.6 percent. points, respectively. Last month, Japan’s food and beverage exports to South Especially, the exports of organic compounds such as semi- Korea also increased 52.7 percent to 3,244 million yen. In that conductor materials reached 24.34 billion yen with a year-on-year period, the increase in Japan’s exports to South Korea was led increase of 18.2 percent whereas the exports dropped 31.8 percent by chemical and electrical products. The products’ contributions year on year to US$20.577 billion yen in October 2019.

51 Industry

Biodegradable Plastic Chemical Companies Working on Green Plastic Materials

By Jung Min-hee

Biodegradable material (right) and product prototype he global biodegradable plastic able polylactic acid films in as early as developed by LG Chem Tmarket is expected to grow from 2009 and the films are currently in wide 4.2 trillion won in 2019 to 9.7 trillion use for food packaging, beverage bottle Hanwha Solutions is working on won in 2025. Under the circumstances, labeling, plastic shopping bag produc- a compound of polyethylene and biode- South Korean chemical companies are tion, and so on. SK Chemicals released gradable plastic in order to overcome the increasing their R&D and expanding Ecotria, a material for use in cosmetic limitations of PLA and PBAT. Samyang related production facilities. containers, by mixing copolyester with Group succeeded in commercializing iso- LG Chem recently developed a com- post-consumer recycled PET. sorbide in 2014. It is a biomaterial derived pletely biodegradable plastic material Lotte Chemical recently developed a from chemical processing of vegetable having the same properties as synthetic post-consumer recycled polypropylene starch and capable of replacing chemical resins. In addition, it recently formed a material. The material approved by the materials in paints, adhesives, and so on. strategic partnership with Neste, the U.S. FDA is being supplied to cosmetic CJ CheilJedang is planning to expand world’s largest biodiesel company, to container manufacturers. Also, the com- its business scope to cover biological produce green industrial materials from pany has produced bio-PET since 2012. resources development. To this end, the non-petroleum biomaterials. It is characterized by emitting 20 per- company will build polyhydroxyalkano- In SK Group, SKC and SK Chemi- cent less carbon dioxide in the process of ate production lines in Pasuruan, Indo- cals are concentrating on the develop- manufacturing as compared with petro- nesia next year and produce 5,000 tons ment of environment-friendly materi- leum-based PET processes and being of the marine biodegradable material a als. SKC commercialized biodegrad- completely reusable and recyclable. year.

Korean Shipbuilders Rely on GTT's Membrane Technology KFTC to Impose Fine on GTT of France for Market Dominance Abuse

By Jung Suk-yee GTT's official website

he Korea Fair Trade Commission age tanks. At the end of 2018, GTT’s GTT to sell the service later when neces- T(KFTC) announced on Nov. 25 global market share amounted to 95 per- sary. GTT turned down the requests and that it decided to impose a fine of 12,528 cent. According to the KFTC, LNG ships the tie-in sale is still ongoing. According million won on Gaztransport & Tech- in the making use GTT’s technologies to the KFTC, this is against market prin- nigaz (GTT), a multinational engineer- and techniques without exception and ciples such as rights to choose and free ing company headquartered in France, the South Korean shipbuilders are heav- competition. for its market dominance abuse in rela- ily dependent on GTT when it comes to “In addition, GTT set contract terms tion to the eight South Korean shipbuild- membrane technology. so that a contract can be canceled when- ers including Daewoo Shipbuilding & The KFTC explained that GTT told ever a shipbuilder calls the validity of its Marine Engineering, Hyundai Heavy the shipbuilders to purchase its stor- patent rights into question,” the commis- Industries, Samsung Heavy Industries age tank engineering service along with sion went on to say, adding, “This means and Hanjin Heavy Industries & Con- the technical license. The shipbuilders, the shipbuilders are subordinate to GTT struction. which have developed their own tech- regardless of patent right expiration and GTT has a license related to the use niques and experienced similar engineer- this constitutes an abuse of bargaining of patents and know-how on LNG storing services since 2015, repeatedly asked power.”

52 Industry

Due to Chinese Imports Korean-made Solar Cells’ Share of Domestic Solar Module Market Slides to 20% By Jung Min-hee

orean-made solar cells’ share of the domestic solar Kmodule market has fallen to the 20 percent range, with imports from China accounting for a significant portion of the remaining 80 percent. According to the Korea Energy Agency, the share of Korean cells in the local solar module market was above 50 percent in 2018 and 2019 but is estimated to have fallen to the 20 percent range in the first half of 2020. This marked the first time that the agency officially announced the market share of Korean-made solar cells. The reason for the sharp drop is that Chinese companies sought to reduce their solar cell inventory through exports. Their inven- Korean-made solar cells account for a mere 20 percent or so of the domestic solar tory increased as a result of the reduction in the Chinese govern- module market. ment’s subsidies. A drop in renewable energy certificate (REC) prices also fueled demand for relatively cheap Chinese cells. Korean-made cells are in short supply while Korea’s cell pro- Another factor was an increase in exports of Korean solar duction capacity is twice its domestic demand at 7.3GW. cells to the U.S. plants of Korean conglomerates such as In fact, Korean companies prefer exports to the U.S. and Hanwha and LG. These companies built new module plants European markets where their products are sold at higher prices in the United States to cope with U.S. safeguards. This is why than in Korea.

To Create a New Market of 4.4 Tril. Won South Korea to Work on Gas Turbines to Break Oligopoly

By Jung Min-hee

he Ministry of Trade, Industry and Energy held a forum Ton Nov. 30 to discuss a national gas turbine development project. The project is to enhance the competitiveness of domestic gas turbines and create a new market of 4.4 trillion won. KG Dongbu Steel's Plant in Dangjin, South Chungcheong Province At present, U.S., German and Japanese manufacturers’ combined market share amounts to 96 percent in the global power regional infrastructure establishment. generation gas turbine industry and South Korean manufacturers Specifically, a series of projects will be launched until 2030 are fully dependent on them. so that 15 gas turbines can be developed along with standard The ministry proposed four strategies at the forum so that LNG models. In addition, a combustion system will be devel- South Korea can join the top four in the industry by 2030. The oped for 300 MW hydrogen gas turbine commercialization by strategies are for early demand creation for industrial ecosystem 2040 and a combined cycle power generation demonstration establishment, advanced R&D for carbon neutrality, competi- project for hydrogen-enriched combustion in a large gas turbine tiveness enhancement for high value-added key components and will be initiated based on the outcome.

53 Industry

Domestic Sales Increase 1.7% South Korea’s Automobile Exports and Production Fall Again in October

By Michael Herh

he Ministry of Trade, Industry and Energy announced on TNov. 16 that South Korea’s automobile exports totaled 200,666 cars last month, down 3.2 percent from a year ago.

After the outbreak of COVID-19, the monthly exports South Korea’s automobile exports totaled 200,666 cars in October, down 3.2 percent dropped 44.6 percent year on year in April, 57.5 percent in May, from a year ago. 40.1 percent in June, 11.7 percent in July and 19.5 percent in August before rebounding 14.8 percent in September. days and partial strikes at GM Korea. The company’s produc- Last month, South Korea’s average daily automobile exports tion volume decreased by approximately 7,000 in one month increased 7 percent year on year to 10,561 cars with sales and this is equivalent to 45.7 percent of last month’s decrease. increasing in North America, Europe and the Middle East. In The average daily production volume of the industry was 17,699 addition, the total value of the monthly exports increased 5.8 last month, up 5.8 percent from a year earlier. percent from a year ago as the export ratio of relatively more The domestic automobile sales increased 1.7 percent to expensive SUVs and green cars rose. 160,151, led by new models and an increase in domestic car Last month, South Korea’s automobile production volume sales volume. Auto parts exports added up to US$1.81 billion, fell 4.3 percent year on year to 336,279 due to less business down 9.3 percent from a year ago.

Aiming to Localize 9 Key Components by Next Year Korea Automotive Technology Institute Localizing Self-driving Technology Successfully

By Michael Herh

he Korea Automotive Technology Institute has adopted Tdomestic components for its self-driving shuttle bus KAMO. The domestic products in the vehicle include its battery drive motor, decelerator and lidar, radar and camera sensors. The institute has designed and demonstrated the vehicle in cooperation with domestic companies. The self-driving technology of the institute is advancing. In addition to the shuttle bus, the institute is working on Level 3 technology such as inter-vehicle distance and lane keeping, lane change assist and assisted driving related to traffic congestion, junctions, intersections and branching roads. It is aiming to complete its localization projects for nine key components by next year. It is developing self-driving components and systems for Self-driving shuttle bus KAMO in partial operation in Daegu City large buses, too. An embedded controller and the nine components including radar and vision are already developed along for Level 4 self-driving. The cloud-linked platform is to contin- with a self-driving simulator meeting ISO-26262 requirements uously improve self-driving AI and control logics and the insti- and imitating real-life traffic environments. tute is collaborating with Hyundai Mobis and Hyundai Autron The institutes’ tasks also include an AI computing platform for the R&D task.

54 Industry

Korean Automakers Focusing More on Hydrogen Vehicles Future Car-related Patent Applications on the Increase By Michael Herh

and hydrogen vehicle fuel cells are on the lowed by Toyota (27.6 percent), Renault- increase with the market paradigm shifting. Nissan-Mitsubishi Alliance (11.5 percent) The Korean Intellectual Property and Volkswagen Group (2.4 percent). Office announced on Nov. 9 that the More specifically, global automak- number of such patent applications was ers’ average annual electric vehicle bat- 4,435 in the 2010s, the annual number tery and hydrogen vehicle fuel cell pat- increased from 277 to 433 from 2010 to ent applications were 263 and 180 in 2019 and the ratio of such patent applica- the 2010s, respectively. The ratios were

Automakers’ patent applications related to electric tions to the total patent applications in 43.2:56.8 in South Korean automak- vehicle batteries and hydrogen fuel cells are on the rise. the automotive industry rose from 7 per- ers and 80.4:19.6 in the others. In other cent to 9.1 percent from 2010 to 2019. words, South Korean automakers are utomakers’ patent applications Hyundai Motor Group accounted for focusing more on hydrogen vehicles as Arelated to electric vehicle batteries 56.4 percent of such applications, fol- the core of future mobility.

Future Car Component Sales Growing Hyundai Mobis Increasing Investment in Future Auto Parts

By Kim Eun-jin

rently investing more than 10 percent of With the group focusing on EVs, the its annual sales in auto parts R&D. This future car component sales of Hyundai is possible because its after-sales service Mobis are continuing to increase despite business unit is acting as its cash cow. the pandemic. Specifically, the sale In the first half of this year, the group reached 1.2 trillion won in the third quar- accounted for 7.2 percent, the fourth- ter of this year, up 77 percent from a year highest, of the global electric vehicle ago. At present, the sales are equivalent market. Hyundai and Kia released Kona to approximately 12 percent of the total

Hyundai Mobis is investing more than 10 percent of its EV and Niro EV in 2018 and the group’s sales of Hyundai Mobis. annual sales in auto parts R&D. EV sales volume has significantly Although its business unit in charge increased since then. Starting from next of such components is still in the red, yundai Mobis has made invest- year, the group will launch three to four the sub-unit responsible for EV parts Hments in key auto parts such as EV models a year based on its dedicated is showing some profits. The company brakes, airbags, lamps, steering systems platform e-GMP. It is aiming to quintuple recently said that the business unit would and automotive electronics since 1999, its EV sales volume to one million vehi- be able to turn a profit in 2022 once the when Hyundai Motor Group reorganized cles and increase the number of its EV new EVs are released. This can be expe- itself. Despite the steady investments, models by 19 to 23 by 2025. dited in that the global EV market is the after-sales service subsidiary of the Hyundai Mobis is currently design- expanding much faster than expected. group is yet to get the upper hand in the ing powertrain systems for use in the The annual R&D investment of global auto parts industry. Although the vehicles in which a battery management Hyundai Mobis is more than one trillion automakers in the group, that is, Hyundai system, a drive motor, a decelerator, a won and it is increasingly pursuing M&A Motor and Kia Motors, are successfully controller, an inverter and a converter are and technical cooperation worldwide. increasing their global market shares integrated. The part Hyundai Mobis is Experts point out that it is only a mat- despite COVID-19, Mobis is still close to responsible for accounts for 16 percent of ter of time for Hyundai Mobis to join the a subordinate parts manufacturer. the price of the vehicle, which is second group of top EV parts suppliers based on Nonetheless, Hyundai Mobis is cur- only to its battery cell. such efforts.

55 Industry

Average Utilization Rate Stands at 80% in Q3 Hyundai and Kia Enjoy Rebounds in Global Utilization Rates

By Michael Herh

quarter to 17.3 percent in the second ter with the addition of the effects of quarter, while that of HMB, a Brazilian new model launches, including G80 and production subsidiary, also plummeted GV80 launches. from 81.7 percent to 21.7 percent during That of HMMA also jumped from the same period. In the case of HMMA, 24.2 percent in the second quarter to a North American corporation that was 88.07 percent in the third quarter, while hit hard by the spread of the COVID-19 HMMR, a Russian production subsid- virus, the utilization rate dived from 80.5 iary, doubled its operation rate from 66.1 percent to 24.2 percent. percent to 125.64 percent. Hyundai Motor's operations in for- Kia Motors also showed the same Hyundai-Kia Motors Design & Technical Center in eign countries stood at 32.5 percent in trend as Hyundai Motor. The average Irvine, California the second quarter. The company’s oper- operation rate of its global business sites yundai Motor Co. and Kia ations in Korea was less hurt by the pan- which stood at 74.9 percent in the first HMotors Corp., which suffered a demic and helped its production volume quarter plunged to a 57.2 percent opera- severe slump in the first half of 2020 due hit 540,000 units in the second quarter. tion rate with 29.4 percent at its Mexican to the spread of COVID-19, are staging a Hyundai Motor’s production began factory and 13.8 percent at its Indian fac- recovery. to normalize in the third quarter as coun- tory in the wake of the COVID-19 pan- Hyundai Motor's global average tries around the world began partially demic in the second quarter. operating rate stood at 79.7 percent in lifting restrictions from May to June. In Since then, the nations had lifted the third quarter. The figure reached 87.7 addition, the Korean government imple- restrictions on travel, prompting factories percent in the first quarter of 2020 but mented a policy to reduce the individ- to resume operations, showing a clear fell to 57.2 percent in the second quarter. ual consumption tax in order to boost recovery in the third quarter. The average The utilization rate of HMI, the com- domestic demand, so the operation rate operating rate in the third quarter touched pany’s production subsidiary in India, of Hyundai Motor’s domestic factories 82.2 percent, exceeding 74.9 percent in plunged from 87.5 percent in the first exceeded 100 percent in the third quar- the first quarter.

German Carmakers Increase Auto Production in China South Korea Places Fifth in Passenger Car Production in 2019

By Michael Herh

outh Korea was ranked fifth in ranked China and the runner-up. China passenger car production in 1999 produces an average of 21.4 million S Hyundai Motor's car assembly plant in India after Japan, the United States, Germany passenger cars per year, while second- and France. It jumped to fourth place in ranked Japan rolls out 8.3 million units. In 2019, 39 percent of Volkswagen 2009 and, a decade later, it moved back For the past two decades, Germany has vehicles were sold in China. Daimler to fifth place in 2019. remained firmly in third place, producing and BMW are also increasingly turning China topped the list in 2009, fol- 4.7 million units on average annually. their eyes to China. For example, elec- lowed by Japan and Germany. In 1999, China's production volume has been in tric car versions of the Mini and Smart China even did not make the top 10. But a steep uptrend amid globalization of the series will be produced jointly in China. 10 years later, in 2009, it took the first auto industry. For example, German man- German carmakers have begun joint pro- spot. Since then, it has been keeping it. ufacturers such as Volkswagen are steadily duction with Chinese firms, promising There is a wide gap between first- increasing their car production in China. technology transfers.

56 Industry

No. of Chargers to Be Increased 10-Fold for 5 Years Korean Government to Facilitate Electric Vehicle Charging By Michael Herh

he South Korean government is planning to raise the Tnumber of electric vehicle chargers to 50 percent of the number of electric vehicles by 2025. In South Korea, the num- bers of electric vehicles and hydrogen vehicles topped 120,000 and 10,000 this year, respectively. The government is going to increase the number of electric vehicle chargers 10-fold for five years to come. Specifically, slow and fast chargers will be increased from 50,000 to 500,000 units and from 9,000 to 15,000 units, respectively. The government is aiming to resolve the driving range limitations of electric vehicles by expanding charging infrastructure, too. To this end, the number of fast chargers installed at 197 motorway service areas nationwide will be increased six-fold to 15 per charging station within five years. When it comes to hydrogen vehicle charging stations, the number is scheduled to be increased from 72 to 310 by 2022 and then to 450 by 2025. Hydrogen vehicles can be refueled as quickly as gasoline and LPG vehicles and, as such, the effect of charger installation is substantial. The government is going to expand the infrastructure fast by utilizing existing facilities such The Korean government is planning to raise the number of electric vehicle (EV) char- as LPG charging stations. gers to 50 percent of the number of EVs by 2025.

Two Notches up from 2019 Hyundai Motor Group Places 4th in Global Electric Vehicle Sales

By Michael Herh

yundai Motor Co. and Kia Motors Corp. placed fourth Hin global electric vehicles in the January-September period of 2020. Market research company SNE Research said on Nov. 23 that Hyundai and Kia sold a combined total of 130,000 electric vehicles, including pure electric vehicles and plug-in hybrids, worldwide during the period. During the same period of 2019, Hyundai and Kia sold 93,000 electric vehicles, taking sixth place. The sales growth was attributed to a brisk performance in the European market and a recovery in the U.S. and Chinese markets from the third quarter. In particular, sales of the flagship Kona Electric and the Niro EV contributed to the sales increase. Meanwhile, Tesla came in first with 316,000 units, followed by Volkswagen Group with 233,000 units and Renault-Nissan-

Mitsubishi with 148,000 units. Hyundai Motor's Kona Electric

57 Industry

To Develop Connected Car OS on Its Own Hyundai Motor Group Chooses Nvidia Chips for Its Cars

By Michael Herh

yundai Motor Group announced on Nov. 10 Hthat all of its vehicles to be released after 2022 will be loaded with a connected car operating system (ccOS) running on NVIDIA Drive. Nvidia Drive is a self-driving platform. Hyundai Motor Group has decided to use the Nvidia chip but will develop a ccOS on its own. In 2020, Hyundai Motor loaded the Genesis GV80 and G80 with a ccOS running on NVIDIA Drive. A connected car is a car that can communicate with other systems outside the car. This allows the car to share data with other devices both inside and outside the vehicle. High-performance semiconductors underpin self-driving technologies that require massive data processing. A car used about 300 semiconductors in 2010, but a vehicle with Level 3 or higher An Nvidia chip to be used for all vehicles from Hyundai Motor Group from 2022 autonomous driving technology needs about 2,000 semiconductors, according tors – power supply, driving, sensing, designed the best chip in the world." to a 2019 report from the Korea Insti- and electricity. In May, Hyundai Autron On the other hand, traditional car tute of Industrial Technology. Industry opened a lab with Hyundai Motor Co. manufacturers such as Germany's Volk- experts predict that the cost of semicon- to jointly develop silicon carbide power swagen and Japan's Toyota are mainly ductors per vehicle will also increase semiconductors. seeking joint semiconductor develop- sharply from US$800 (based on electric Major automobile manufacturers ment with chipmakers such as Nvidia. vehicles) in 2018. This is why it is dif- are also speeding up the internalization However, some predict that it will be ficult for automakers to simply rely on of semiconductor design. Tesla, which difficult for carmakers to actively devel- semiconductor outsourcing. recently announced plans to produce its op semiconductors as they first need Hyundai Motor Group is employing own batteries, is considered to be the to internalize batteries, which account a two-track strategy. Its plan is to rely most aggressive in semiconductor devel- for about 40 percent of electric vehicle on outside companies for high-perfor- opment. Since 2019, Tesla has been costs. “The situation facing carmakers mance semiconductors such as applica- using its own chips instead of Nvidia can be summed up this way: If we do tion processors (AP) which are difficult products for its advanced driver assis- nothing, we will lose some of our lead- to develop. But it will internalize semi- tance system (ADAS), which is called ership in future cars. But we do not have conductors easy to develop as much as “Autopilot.” The electric car giant will the resources to do things on our own," possible. Hyundai Autron, the group’s outsource production of 7-nm chips to said Lee Hang-gu, a researcher at the semiconductor affiliate, is currently Taiwan's TSMC in 2021. Elon Musk, Korea Automotive Technology Institute. developing four types of semiconduc- CEO of Tesla, once said, "Tesla has “They are in a dilemma.”

58 Industry

Defect Description Report Refers to Faulty BMS Control Software Hyundai Motor Contradictory in Handling Kona Electric Fires

By Michael Herh The defect description report Hyundai Motor submitted to the NHTSA on Oct. 13

yundai Motor recently submitted some defective LG Chem battery cells cell is the cause of the fires. Ha report on Kona Electric fires and the resultant physical damage to sep- Under the circumstances, some are to the National Highway Traffic Safety arators. LG Chem denied the possibility, pointing out that the different reports are Administration (NHTSA). According to saying that nothing has been clarified as because the punishment for an intention- the report, the vehicle’s high-voltage bat- to whether the cause is the battery cell ally hidden lethal defect is milder in South tery system might contain certain electri- or the battery management system, and Korea than in the United States. Specifi- cal deficiencies, such as internal damage yet Hyundai Motor continued to hold LG cally, it is 10 years or less in prison or a to certain cells of the lithium-ion battery Chem accountable. fine of 100 million won or less in South and/or faulty battery management sys- In the meantime, the automaker Korea whereas it is 15 years or less in tem control software, that could increase recently updated the battery manage- prison or a huge fine in the United States. the risk of an electrical short circuit after ment system. Then, both the NHTSA Six years ago, Toyota provided false fully charging the Li-ion battery. and the Ministry of Land, Infrastructure information on sudden unintended accel- Earlier, in South Korea, the automak- and Transport of South Korea questioned eration in the United States and had to pay er claimed that the fires resulted from why the update is necessary if the battery a fine of no less than US$1.2 billion.

Kona Owners Demand 8 Mil. Won per Person Kona EV Recall Almost Completed, but Car Owners File Class Action Suit for Compensation By Michael Herh

Firefighters extinguish a Kona EV fire at a parking lot yundai Motor Co. has almost Vehicle Club," complaints are posted that of the Community Center in Namyangju, Gyeonggi Province on Oct. 17. Hcompleted a recall of the Kona the Kona Electric has become inoperable Electric Vehicle (EV), which has recently after the recall. dai Motor replace the entire battery sys- suffered a series of fires, but owners Some café members also complained tem assembly (BSA) including the bat- of the model are moving to file a class that charging time has become too long tery pack free of charge. action lawsuit to demand compensation since the BMS update as the logic to They also demand, along with emo- from the automaker. check safety during charging has been tional damages, compensation for dam- More than 90 percent of the 25,564 strengthened. age caused by the falling value of their Kona EVs subject to the recall have been On Nov. 12, 173 owners of the Kona vehicles and user inconvenience caused by recalled, Hyundai Motor said on Nov. 22. EV filed a complaint with the Seoul Cen- increased charging time after the recall.. The automaker started a recall on Oct. 16 tral District Court seeking compensation "Our clients are demanding 8 million to update the battery management system from Hyundai Motor. won in damages per person, and there is (BMS) of the Kona EV manufactured Law firm Jeongse, which legally rep- a possibility that the amount will increase from Sept. 29, 2017 to March 13, 2020, resents the Kona EV owners, said that in the course of their defense,” the law and immediately replace the battery if they are demanding a full refund when firm said. “Following this lawsuit, we any signs problems are found. they cancel or revoke their purchase con- will also file a second lawsuit with other However, even after the recall, contracts. Kona EV owners who want to file addi- sumers have been complaining about the If purchase contracts are maintained, tional lawsuits," said an official at the car. On NAVER's online café "Electric the Kona EV owners demand that Hyun- law firm.

59 Industry

Investigation Underway to Determine Cause of Fires Kona EV Fires Put Brakes on Hyundai Motor-LG Chem Battery Joint Venture in Indonesia By Michael Herh

Infrastructure and Transport and the Korea mas Industrial Complex in Java, which is Transportation Safety Authority. scheduled to start operations in December Hyundai Motor and LG Chem have 2021, the carmaker will be able to prune been discussing the launch of a battery logistics costs in shipping its cars to Indo- joint venture in Java of Indonesia since nesia and other neighboring countries. 2019. The investment will amount to tril- The Indonesian government’s repeat- lions of won. They preferred Indonesia ed requests for the two companies’ because the Southeast Asian country is investment in Indonesia as part of its Firefighters put out a fire that broke out in a Kona electric vehicle during charging at a parking lot of the rich in nickel, cobalt and manganese, the plan to make the country an EV industry Namyangju Community Center, Gyeonggi Province, at key materials for EV batteries. hub in 2030 also played a role in the two around 3:40 a.m. on Oct. 17, 2020. In addition, if Hyundai Motor pro- companies’ decision to set up the joint yundai Motor Co. and LG duces EVs at its auto plant in the Delta- venture in Indonesia. Chem have stopped promot- Hing the planned establishment of an electric vehicle (EV) battery LG Chem Denies Minister’s Remarks joint venture in Indonesia due to the recent series of Kona EV fires. The two compa- Indonesian Minister Says LG Chem Will Sign nies reportedly planned to officially launch Agreement on EV Battery Production This Week the joint venture at the end of 2020. Although the two companies say that By Jung Min-hee there had not been anything concrete Luhut Pandjaitan, Indonesia’s coordinating minister for maritime affairs and about the establishment of the joint ven- investment, reportedly said on Nov. 17 that LG Chem will also sign an agreement of ture, observers say the Kona EV fires electric vehicle (EV) battery production this week if there is no unexpected change. have affected their joint venture plans. However, LG Chem has officially stated that nothing has been confirmed. There is a subtle war of nerves According to Indonesian media reports on Nov. 18, Luhut stressed in a video between the two companies over who is conference on the previous day that LG Chem will soon sign the deal, adding that responsible for the fires. Indonesia wants to work with friends from China, the United States, and anywhere. LG Chem's faulty manufacturing of Indonesia is a producer of nickel, cobalt and manganese, which are used for pro- battery cells and Hyundai Motor’s errors duction of EV batteries, and hopes to become a global EV industry hub in 2030. in setting up battery management systems The Indonesian government said earlier that it had signed a heads of agreement are cited as the possible causes of the fires. (HOA), a non-binding document which sets out the key terms of a proposed agree- Observers say that discussions on the bat- ment between parties, with LG Chem and CATL to produce lithium batteries. It recent- tery joint venture can begin again only ly told local media outlets that CATL confirmed its investment in Indonesia. It also claimed that Tesla was in the final stage of negotiations about investing in Indonesia. after it is determined what caused the fires. The Indonesian government made every effort to attract LG Chem's battery plant Since the launch of the Kona EV in following a Hyundai Motor car plant in Bekasi outside Jakarta. LG Chem has been in 2018, a total of 14 fires have broken out, talks with Hyundai Motor about the establishment of a joint battery company in Indo- including 10 in Korea and four overseas. nesia but has not announced the final results. The cause of the Kona EV fires is current- "Nothing has been confirmed regarding investment in a battery plant in Indone- ly under investigation. The model is now sia,” an LG Chem official said, commenting on Luhut's remarks. “It is not true that being recalled. The investigation is being we will sign an agreement on a battery plant this week." conducted jointly by the Ministry of Land,

60 Industry

To Compete with Korean Rivals Chinese and Japanese EV Battery Makers Promoting Plants in Europe By Michael Herh

media outlets said on Nov. 19. The three companies are taking aim at the European EV market based on Panasonic's battery technology. They will conduct a six-month feasibility study before carrying out the project. SVOLT also recently announced its plan to invest about 2 billion euros in Germany to build a 24GWh battery plant. Earlier in July, CATL formed an alliance with Honda by selling a 1 percent stake to the Japanese carmaker. It announced in August that it would strengthen a partnership with Germany's Daimler Group. Korean, Japanese and Chinese battery makers are expected to square off in the European market, a mecca for carmakers. Currently, LG Chem has a battery plant in Poland, while Sam- sung SDI and SK Innovation each have a plant in Hungary. Chi- na's CATL, the world’s second largest EV battery maker after LG Chem, is also planning to build a battery plant in Germany

Ji Dong-seop (third from right in the second row), CEO of SK Innovation’s battery busi- to expand its share of the European market. ness, poses for a commemorative photo with officials of SK Battery Hungary during a In the European market, Korean battery makers have shown visit to the company’s factory in February 2020. outstanding performance. While Panasonic, which had been the world's No. 1 player until 2017, did not pay much attention to anasonic of Japan and SVOLT of China are moving to the European market, LG Chem, Samsung SDI and SK Inno- Pestablish electric vehicle (EV) battery plants in Europe to vation established plants in Europe and increased their market challenge Korean battery makers, which are currently dominating shares through aggressive investments. the European market. Panasonic is the world's third-largest battery Although shares of the three Korean battery makers in the maker, while SVOLT is the third-largest battery maker in China. European EV battery market have not been accurately counted, Panasonic is planning to establish an EV battery plant in they are believed to have a significantly wide gap with Chinese Norway in partnership with oil and gas company Equinor and and Japanese battery makers. Some experts say that LG Chem aluminum company Norsk Hydro of Norway, major foreign alone accounts for about 70 percent of the market.

Korean Battery Material Producers Expanding Market Shares China and Japan Ahead of Korea in EV Battery Materials By Michael Herh orea’s three major electric vehicle (EV) battery makers K-- LG Chem, Samsung SDI and SK Innovation -- are expanding their presence in the global EV battery market. But Korean battery material producers are still lagging behind Chi- nese and Japanese companies. Korea's share in the world's four lithium-ion battery material market, excluding electrolytes, remained in single-digit in 2019, falling far short of the shares of China and Japan, according to a report from the Yano Economic Research Institute in Japan. Among the four major materials, anode active material Anode active material from Cosmo AM&T takes up the largest share of EV battery production costs. Korea

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accounted for 7.5 percent of the world Ford, Volkswagen Opposed to ITC's Ruling against SK Innovation anode active material market in 2019, down from 9.2 percent in 2017 and 8.5 U.S. ITC Requests LG Chem percent in 2018. The proportion was dwarfed by those of China (69.2 per- and SK Innovation to Present cent) and Japan (16.2 percent). Anodes account for 22.2 percent of battery costs, Transcripts of Interviews which is much higher than 5.8 percent with Ford and Volkswagen of cathodes, 11.2 percent of separators and 6.4 percent of electrolytes, SNE By Jung Min-hee Research said. Korea’s shares in the markets for the three other materials have been rising. In the case of cathode active materials, Korea's share rose from 3.9 percent in 2017 to 6.0 percent in 2018 and 6.1 percent 2019. In Korea, POSCO Chemi- cal is the only company that produces natural and man-made graphite cathode active material. Korea also increased its share in the separator market from 8.3 percent in 2017 to 8.5 percent in 2018 and 9.2 percent in 2019. Korea also saw its market share rise to 10.0 percent in the field of electrolytes in 2019. However, China accounted for as much as three-quarters in the markets of battery main materials -- 69.2 percent in The ITC has told LG Chem and SK Innovation to submit the transcripts of the interviews that their lawyers had with Ford and Volkswagen. anode active materials, 76.6 percent in cathode active materials, 69.8 percent in electrolytes and 55.7 percent in separa- he U.S. International Trade Commission (ITC) has requested LG Chem and tors. Japan also had twice as high as mar- TSK Innovation to present the transcripts of the interviews that their lawyers ket shares of Korea. Japan enjoyed a 16.2 had with Ford and Volkswagen regarding the electric vehicle (EV) battery trade secret percent share in the anode active material infringement suit between the two Korean firms. market, a 17.3 percent share in cathode Ford and Volkswagen have expressed their opposition to the default judgment active materials and 20.2 percent in the against SK Innovation through petitions to the ITC. electrolyte market and a 35.1 percent The lawyers of LG Chem and SK Innovation had interviews with Ford and Volk- share in the separator market. swagen on Oct. 30. LG Chem submitted the transcripts to the ITC. Attention is focus- "As Korean battery manufacturers' ing on why the ITC demanded the transcripts ahead of its final determination. shipments of electric vehicle batter- Ford is planning to use SK Innovation batteries for the F Series electric trucks to be ies have increased, the status of Korean produced in the United States, while Volkswagen plans to rely on SK Innovation bat- material manufacturers may rise, too," teries for almost all electric vehicles produced in the U.S. To supply batteries to these the Yano Economic Research Institute clients, SK Innovation is building an EV battery plant in Georgia. said. "How Korean material manufac- Ford said in a petition to the ITC in May that LG Chem cannot supply alterna- turers will expand their presences in the tive batteries for the F-150 EV. It asserted that the ITC's default judgment against SK European battery market will determine Innovation will negatively affect the entire U.S. economy, public interest, health and their market shares." welfare. Meanwhile, the Yano Economic Volkswagen also claimed that if the contract between SK Innovation and Volkswa- Research Institute foresaw that the mar- gen falls through, it will hurt U.S. workers who want high-wage jobs and consum- kets of four major materials for lithium- ers who want electric cars. ion batteries will shrink 4.5 percent from SK Innovation is paying keen attention to whether the ITC's examination of the 2019 to US$20,038.1 million in 2020, interview transcripts can be a variable in making its final verdict. The ITC earlier ruled but will return to growth after 2021 and against SK Innovation in February 2020, and SK Innovation filed an appeal. The final grow to US$36,686 million in 2025. determination was postponed from Oct. 5 to Oct. 26 and then again to Dec. 10.

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Final Ruling Slated for Nov. Prior to the final verdict, a hearing will 30, 2021 be held in March 2021to allow the litigants to make their own arguments and counter- arguments. The ITC will present its initial LG Chem- determination on July 30, 2021. As initial SK Innovation determinations are upheld in 90 percent of the cases handled by the ITC, they are just Battery Lawsuits as important as final determinations. Concerns have been raised over the prolonged law- A total of three lawsuits are currently suits between LG Chem and SK Innovation over bat- Prolonged tery patents. By Michael Herh underway between LG Chem and SK Innovation at the U.S. ITC. patent suit filed by SK Innovation against LG s a final ruling on the electric The first one was filed by LG Chem Chem is slated for Nov. 30, 2021. Avehicle battery disputes between in April 2019, which claimed that SK If the proceedings are carried out as LG Chem and SK Innovation is scheduled Innovation stole its business secrets. scheduled, it will take more than a year to come out in late November 2021, con- Later in September, SK Innovation filed from the present to make a final ruling cerns have been raised over prolonged liti- a lawsuit against LG Chem, claiming that on all lawsuits pending in the ITC. gation between the two Korean companies. LG Chem infringed on its patents on bat- If the two companies reach an agree- However, the schedule may change, and teries such as pouches and modules. LG ment even before the final rulings, their the two companies may settle their disputes Chem responded by filing a countersuit legal battle will come to an end but out of court before the final ruling. against SK Innovation, claiming that SK if they drag it to the final rulings, both The U.S. International Trade Com- Innovation infringed on LG Chem’s pat- companies are expected to suffer signifi- mission (ITC) has recently decided to ents on separators and anode materials. cantly due to the prolonged lawsuits. make a final ruling on a patent suit filed In the case of the lawsuit on trade secrets, Meanwhile, LG Energy Solution by SK Innovation against LG Chem on a final determination is set for Dec. 10. A final (tentative name) will succeed LG Chem's Nov. 30, 2021. In the lawsuit, SK Inno- ruling on the patent suit filed by LG Chem battery lawsuit with SK Innovation as vation claims that LG Chem violated its against SK Innovation is scheduled to come LG Energy Solution will be split off patented battery technology. out on July 19, 2021, while a ruling on the from LG Chem in December.

Shipowners' Interest in LPG-fueled Vessels Growing South Korean Shipbuilders Anticipating Increase in LPG-powered Vessel Orders By Jung Min-hee South Korean shipbuilders are expected to win an increasing number of LPG-powerd vessel construction outh Korean shipbuilders are and 113 in the following years. In contrast, orders. Sexpected to win an increasing the latter is 24, 26 and 16, respectively. first newly-built medium-sized and large number of contracts for LPG vessels LPG carriers currently use bunker oil. LPG vessels, respectively. with the number of ships older than 15 These are predicted to be replaced with On Nov. 10, Hyundai Heavy Industries years on the increase. vessels using LPG in view of environmen- replaced the engine of its five-year-old 84K At present, the number of medium- tal regulations and fuel economy compe- LPG carrier with an LPG engine and suc- sized LPG carriers that have been in tition. According to industry sources, the cessfully completed its trial operation. It is operation for more than 15 years is 46. 20-year fuel cost of 20-45K used LPG the world’s first LPG vessel. As compared The number is estimated to rise to 62 in carriers is 8.8 times higher than the cost of with bunker oil vessels, its fuel consump- 2023 and 77 in 2024. On the other hand, building a new LPG-powered vessel. tion, greenhouse gas emissions and sulfur the number of LPG carriers scheduled to In the meantime, Hyundai Mipo oxide emissions at the maximum speed be delivered this year is three, in 2021 is Dockyard and Hyundai Samho Heavy are 90 percent, 80 percent and 3 percent, seven and in 2022 is 10. Industries are scheduled to deliver their respectively. South Korean shipbuilders The same applies to very large gas car- LPG vessels in June and July next year have won a total of 35 contracts for LPG riers. In this category, the former number is after contract signing in July and August vessels so far, including 28 of Korea Ship- 70 now and estimated to reach 79, 87, 102 2019, respectively. Those are the world’s building & Offshore Engineering.

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Equinor Adds Sevan SSP's Option to Concept Studies Korean Shipbuilders Face Dwindling Chances to Win Tender for Design of FPSO for Arctic Wisting Oil Field By Jung Min-hee A cylindrical floating production storage and offloading (FPSO) unit built by Hyundai Heavy Industries orean shipbuilders are expected before it can make a final concept select longer have the upper hand over Singapore Kto suffer another setback in bid- during the second quarter of 2021. that they had in the past. This is because ding for offshore plant projects. Sevan SSP is an engineering com- they are lagging behind in price competi- Daewoo Shipbuilding and Marine pany acquired by Sembcorp Marine of tiveness. Singapore can take advantage of Engineering and Samsung Heavy Singapore in 2018. cheap labor from India, Malaysia and Paki- Industries are participating in a tender Daewoo Shipbuilding and Marine stan. About 70 percent of Sembcorp Marine arranged by Norway's state-run oil com- Engineering and Samsung Heavy Indus- employees are non-Singaporeans, with pany Equinor to select the design of a tries each formed a partnership with an many from India, Pakistan and Indonesia. floating production storage and offload- engineering company and presented a Industry insiders estimate that ing (FPSO) unit to be used to develop the ship-shaped design against Sevan SSP’s Korea’s labor cost will be 6.5 times high- Wisting oil field in the Arctic region. cylindrical one. er than that of Singapore in the offshore Equinor awarded a contract to Sevan Initially, Austrian state-owned oil plant industry. The Singaporean compa- SSP on Nov. 12, saying that it has decid- refinery OMV, which was the largest ny could take advantage of its price com- ed to further assess a floating production shareholder of the Wisting project, ruled petitiveness based on low labor cost, a unit based on a circular FPSO solution. out the cylindrical option, fueling expec- crucial factor that determines shipbuild- This does not mean that the two Kore- tations that Korean companies will win ers' profits. A big problem is that Korean an shipbuilders, who have presented a the tender. However, OMV handed over shipbuilders do not even overwhelm their ship-based FPSO solution, have lost its stake to Equinor in 2019, reviving the competitors in terms of technology to the tender. It means Equinor has added option of a circular FPSO. offset their poor price competitiveness. Sevan SSP's design to its concept study. A final decision on the design will be Meanwhile, the oil reserves of the Wist- Announcing the contract award to Sevan made in the second quarter of 2021. Indus- ing project are estimated at 450 million bar- SSP, it noted that a lot of work remains try watchers say that Korean shipbuilders no rels, which are valued at US$5.4 billion.

The 5th Country to Localize tions on gas turbines have been increasing Gas Turbines recently. Although the number of patents on gas turbines for power generation was Korea Successfully about 100 per year between 2010 and 2013, the figure soared to about 200 per Localizes Gas year from 2015 to 2019. Turbines for LNG In particular, Doosan Heavy Industries A large gas turbine for power generation developed by & Construction has applied for 384 patent Doosan Heavy Industries & Construction Power Generation applications over the past three years since By Jung Min-hee Italy. As of 2018, GE leads the global gas tur- around 2017, when its license contract with bine market with a 53 percent share, followed Mitsubishi expired, far outpacing Mitsubi- orean companies related to pro- by Siemens with 29 percent, Mitsubishi with shi (158 cases), General Electric (101 cases), Kduction of gas turbines, a key com- 15 percent and Ansaldo with 3 percent. and Siemens (41 cases) during the same ponent of power plants, are actively apply- According to the Korean Intellectual period. That is to say, Doosan is focusing on ing for patents. It is difficult to secure basic Property Office, Korea became the fifth securing technology and patents. technologies for gas turbines and the entry country to develop the technology for gas The Korean government aims to increase barrier for the gas turbine market is high. turbines for LNG-fired power generation LNG power generation from the current The world gas turbine market has been in 2019 as Doosan Heavy Industries and 40GW level to 60GW in the future. Accord- dominated by four powerhouses -- General Construction succeeded in localizing gas ingly, it plans to expand LNG-based power Electric of the United States, Siemens of Ger- turbines for power generation. generation to 60GW by introducing over 24 many, Mitsubishi of Japan and Ansaldo of As a consequence, patent applica- additional gas turbines by 2034.

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Crude Steel Output Forecast to Fall Below 70 Mil. Tons in 2020 South Korea Suffers a Sharp Drop in Crude Steel Production

By Jung Min-hee Production of crude steel in Korea is expected to fall below 70 million tons this year. roduction of crude steel in the low 5 million ton range until July PKorea is expected to fall below before edging up to 5.8 million tons smaller than that of Japan (-19.1 per- 70 million tons in 2020. The new coro- in August. If this trend holds, Korea’s cent), the United States (-18.8 percent), navirus crisis has reduced demand for crude steel production will reach around and India (-16.5). China was the only crude steel from upstream industries 67 million tons in 2020, according to major steel producer with a 4.5 percent such as automobiles, shipbuilding, and industry estimates. Even if production increase in output. Chinese steel com- construction. Korea’s drop in crude increases in the fourth quarter, the peak panies ramped up crude steel produc- steel production was sharper than the season, it will not be easy for Korea to tion as the Chinese government came world average. exceed 70 million tons in crude steel up with measures to boost domestic Korea's crude steel production in the production. It is the first time in four demand for steel after the COVID-19 January-September period reached 49.6 years that annual crude steel produc- crisis subsided. million tons, down 7.5 percent from the tion falls below 70 million tons. Output Unless the current trend chang- same period of 2019, said the World stood at 68.6 million tons in 2016. es, Korea is expected to place sixth in Steel Association and the Korea Iron & The decline in Korea’s crude steel crude steel production in 2020 as it did Steel Association on Nov. 19. production was sharper than the global in 2019. The top five are China, India, Korea’s crude steel output stayed at average of 3.2 percent. However, it was Japan, the United States and Russia.

Business Environment Changes Steelmakers Make U-Turn to Korea One After Another

By Jung Min-hee

Chungcheong Province to produce cold- Aju Steel, two to three mid-sized steel- rolled and plated products. It is the larg- makers are considering making a U-turn est U-turn by a Korean company since to Korea," a KOSA official said. "Korean the outbreak of COVID-19. The steel- steelmakers’ U-turns will increase as the maker operates a steel mill in Dangjin. Ministry of Trade, Industry and Energy In May, Aju Steel, which is head- has recently introduced a U-turn subsidy quarted in Gumi, North Gyeongsang system." Province, decided to liquidate its Philip- Under the subsidy system, up to 30 KG Dongbu Steel's Plant in Dangjin, South pine plant and produce steel sheets for billion won in subsidies is provided to a Chungcheong Province electronics and dry materials in Gim- company which makes a U-turn to Korea eshoring by Korean steelmakers cheon, North Gyeongsang Province. Aju and build a factory in a provincial area. Ris growing. Steel became the No. 1 U-turn company The government also covers returning KG Dongbu Steel decided on Nov. in the Korean steel industry. companies’ costs for plant site acquisition, 2 to liquidate its plant in Jiangsu Prov- Korean steelmakers are reshoring as plant construction and relocation costs up ince, China, and return to Korea, accord- it has become more advantageous to pro- to 44 percent. In addition, U-turn compa- ing to the Korea Iron & Steel Association duce steel products in Korea due to the nies can enjoy benefits such as employ- (KOSA) on Nov. 16. spread of protectionism and an oversup- ment subsidies, corporate tax cuts, tariff KG Dongbu Steel said it plans to ply in the global market. reductions, package support for smart fac- invest 155 billion won in Dangjin, South "In addition to KG Dongbu Steel and tories and restructuring consulting.

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Ocean Freight Charges Rising Rapidly Container Carriers Extremely Hard to Come By

By Jung Min-hee

he profitability of South Korean exporters is deteriorat- Ting with the won-dollar exchange rate dropping and ocean freight charges rising rapidly. The Shanghai Containerized Freight Index (SCFI) rose by Container carrier of HMM at Busan New Port 134.57 points to 1,664.56 last week alone. It is the highest since records began in October 2009. Likewise, the freight charge between South Korea and Europe. Ships to the United States applied to the seaway to the United States hit an all-time high of are still hardly available. “California has no port available to a US$3,871 per FEU. 24,000 TEU carrier,” HMM explained, adding, “Besides, the Both Samsung Electronics and LG Electronics are having Panama Canal cannot be used by those exceeding 16,000 TEU.” a hard time sending their products to the United States before Although HMM has rescheduled its vessel operations to send the year-end peak season. LG Chem is sending electric vehicle more containers to the United States, the demand is still over- batteries to Europe by train after having failed to get a ship. For- whelming. It is scheduled to receive eight 16,000 TEU vessels eign shipping companies are canceling their contracts to demand next year, and then its capacity will increase to 900,000 TEU. additional charges. In the meantime, the won-dollar exchange The ships are being built by Hyundai Heavy Industries. rate fell 7.8 won to 1,120.4 won per U.S. dollar on Nov. 6. It is “Three out of the eight can be built within this year and deliv- said that the rate would reach 1,050 won or less per U.S. dollar ered earlier than scheduled,” it said. “Actual employment of the next year. vessels is possible after talks with the other THE Alliance mem- In South Korea, a total of 12 very large container carri- bers and we are trying to make it happen as early as possible,” ers were built this year. All of those are currently in operation HMM explained.

Shanghai Containerized Freight Index Jumps Ocean Freight Charges Rising Rapidly By Jung Min-hee

cean freight charges are soaring worldwide. Major In particular, the index for Southeast Asian routes surged Oshipping companies are flocking to routes to the Amer- from 475 to 728. In other words, ocean freight charges are going icas after a hike in demand from the United States and this is up across the world whereas American sea routes led a rise in leading to a rapid rise in charges for shipping to Europe, South- charges this past summer. east Asia, etc. The Shanghai Containerized Freight Index (SCFI) jumped 8.8 percent from 1,529 to 1,664 from Oct. 30 to Nov. 6 and then to 1,857 on Nov. 13. In the second half of this year, the index is continuing to rise except three weeks. Last week’s increase was led by rapidly increasing charges for shipping to Northern Europe, the Mediterranean and South- east Asia. For example, the indices for Northern Europe and the Mediterranean rose 21 percent and 22.6 percent to 1,508 and 1,674 in just one week, respectively. “An increase in consumption in the United States is leading to ship and container concentration on the United States,” said an industry source, adding, “As a result, supply to the other routes is falling to cause a rise in freight charges.” Ocean freight rates continue to rise worldwide.

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Inheritance Tax Estimated at over 10 Tril. Won Change in Samsung Group Governance Structure Likely to Take Time By Jung Min-hee

Life Insurance and there are already a lot of friendly shareholders, including Samsung Foundation of Culture (4.68 percent) and Samsung Life Public Welfare Foundation (2.18 percent). As mentioned above, the government and the ruling party are moving ahead with an Insurance Business Act amendment. Once the National Assembly passes it, Samsung Life Insurance must reduce its shareholding in Samsung Electronics from 8.51 percent to 3 percent. The shares that must be sold are equivalent to no less than 20 trillion won. The vice chairman mentioned the necessity of a change in governance structure in May this year. In the long term, the change can take the form of holding company structure adop- Samsung Group's governance change is expected to take time. tion, that is, division of Samsung Group into an operating hold- ossible changes in the governance structure of Sam- ing company revolving around Samsung C&T and a financial sung Group are drawing much attention after the holding company revolving around Samsung Life Insurance. Pdeath of its chairman. The adoption is unlikely in the near future because Samsung Samsung Electronics vice chairman Lee Jae-yong needs at C&T needs to own 20 percent of Samsung Electronics to that least some of the late chairman Lee Kun-hee’s shares in Sam- end and this requires tens of trillions of won. In other words, sung Electronics and Samsung Life Insurance in order to keep the vice chairman may maintain the current structure by inherit- governing Samsung Group. Variables include the fact that the ing and keeping his father’s Samsung Electronics and Samsung government and the ruling party are working on an Insurance C&T shares. Business Act amendment, which may affect the governance As for the trial, the prosecution is contending that Samsung structure of Samsung Group, and the fact that the vice chair- C&T and Cheil Industries were merged for the purpose of his man’s trial is ongoing regarding management succession. succession and, in the course of the merger, Samsung Group At the end of June this year, the deceased owned 4.18 per- conducted illegal dealings to lower the stock price of Samsung cent of Samsung Electronics common shares, 0.08 percent of C&T and boost the stock price of Cheil Industries, where the Samsung Electronics preferred shares, 20.76 percent of Sam- vice chairman had a large number of shares. sung Life Insurance, 0.01 percent of Samsung SDS and 2.88 “Any change in Samsung’s governance structure may be percent of Samsung C&T. He is the largest shareholder in Sam- time-consuming due to the trial,” said an industry insider, add- sung Life Insurance and his shareholding in the insurance coming, “In addition, the shareholdings of his younger sisters are pany exceeds Samsung C&T’s 19.34 percent. The vice chair- very low and management disputes are extremely unlikely.” man’s shareholding in Samsung Electronics stands at 0.7 percent The legal heirs of the deceased are his wife, the vice chair- whereas the deceased owns more than 4 percent of the company. man, Hotel Shilla president Lee Boo-jin and Samsung Welfare This means the vice chairman needs to inherit some Sam- Foundation director Lee Seo-hyun. The combined inheritance sung Life Insurance shares to strengthen his control. At the end tax is estimated at over 10 trillion won. An inheritance tax rate of June, the vice chairman owned only 0.06 percent of Samsung of 60 percent is applied to the appraised value of the late chair- Life Insurance. He is currently exercising management rights man’s shares and 50 percent is applied to the rest of his proper- with Samsung C&T’s 5.01 percent shares in Samsung Electron- ties. According to the current law, a bequest of over three billion ics and those of Samsung Life Insurance. won is subject to the maximum tax rate of 50 percent and 20 Still, there is no need for the vice chairman and Samsung percent is additionally charged on the appraised value when the C&T to inherit all the shares from the late chairman. This is deceased is the largest shareholder or a related person. Their tax because Samsung C&T already owns 19.34 percent of Samsung return and payment is due on April 30, 2021.

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Owner Family Needs Cash to Pay Inheritance Tax Dividend Payments by Samsung Group Affiliates Expected to Increase By Jung Min-hee

amsung Group affiliates are Samsung, he left no will. In that case, his Sexpected to increase their divi- spouse is supposed to receive one-third dend payments to a record-high level with and his son and daughters, that is, Sam- regard to Samsung Electronics’ three-year sung Electronics vice chairman Lee Jae- plan to that end and the inheritance tax yong, Hotel Shilla president Lee Bu-jin after the death of chairman Lee Kun-hee. and Samsung Welfare Foundation direc- The three-year plan is scheduled to be tor Lee Seo-hyun are supposed to receive finalized this year. Samsung Electronics two-ninths each. In any case, the largest Samsung Group affiliates are expected to increase is planning to release a new dividend pay- portion of the late chairman’s Samsung their dividend payments to a record-high level. ment plan in January next year. Electronics shares is likely to go to his At present, the late chairman owns son, who is leading the most important tribution to a welfare foundation. Sam- 4.18 percent of Samsung Electronics, subsidiary in the group. sung Group has four such foundations, 20.76 percent of Samsung Life Insur- In the National Assembly, an amend- each can have up to 10 percent of issued ance and 2.9 percent of Samsung C&T. ment to the Insurance Business Act is shares and three out of the four current- The total equity value is approximately currently under discussion. If the bill ly own less than 5 percent of subsidiary 18 trillion won and the inheritance tax is passed, affiliate companies’ share- shares each. Even the late chairman’s is about 10.9 trillion won. This means holding in Samsung Electronics will Samsung Life Insurance shares amount- the owners of the group need to keep as become much lower. The family needs ing to 20.76 percent can be divided with much cash as possible and more divi- to increase its shareholding to keep its the foundations. dends from Samsung Group subsidiaries management rights and this is another This is a less likely option, though. is essential. factor that can lead to more dividends. The vice chairman promised not to do How the shares will be bequeathed Last year, the family received 750.3 bil- so in as early as 2015. In addition, the is currently the most important fac- lion won in dividends. The amount for South Korean government is working on tor regarding the governance structure the following year is likely to substan- an amendment to the Monopoly Regula- of Samsung Group. The owner family tially exceed it. tion and Fair Trade Act so that no vot- already handled the matter and is about According to the current law, the ing rights can be exercised with welfare to make an announcement. According to family can reduce the tax by partial con- foundations’ subsidiary shares.

FKMTU Represents 4 Samsung Unions at Talks with Management Labor and Management of Samsung Electronics Hold a Historic First Meeting By Kim Eun-jin

he labor and management of senting Samsung Electronics' four labor said Na Ki-hong, head of the Human TSamsung Electronics sat face to unions held an ice-breaking meeting with Resources Team at Samsung Electronics' face for the first time on Nov. 3. It has the management at the KFTU Building Management Support Office who attend- been six months since Samsung Elec- in Yeouido, Seoul, before the first round ed the meeting. "We hope that both the tronics vice chairman Lee Jae-yong of collective bargaining talks. labor and management will understand announced the end of Samsung’s long- "This is a very important and mean- each other and create a model of win- standing union-free management policy. ingful time for creating Samsung's new win and cooperative labor-management The joint negotiation team repre- labor-management relations and culture," relations while recognizing each other’s

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Heads of 3 Business Units Retained Lotte Group Cuts Number of Executives by 20% By Choi Moon-hee

Na Ki-hong (right), head of the Human Resources Team at Samsung Electronics' Management Support Office, bows to Kim Man-jae (second from left), chairman of the Federation of Korean Metalworkers' Trade Unions (FKMTU) under the Federation of Korean Trade Unions (FKTU), at a meeting of Samsung Electronics' labor-management negotiations at the FKTU office in Yeouido, Seoul, on Nov. 3. importance as partners." Referring to Lee Kun-hee, the late Samsung Group chairman who passed away on Oct. 25, Kim Man-jae, chairman of the Federation of Korean Metal- workers' Trade Unions (FKMTU) under the Federation of Korean Trade Unions (FKTU), said, "We hope that Samsung will join forces with workers to succeed the late chairman Lee’s will to create a global company." Lotte Group has reduced the number of executives by 20 percent. "We should not forget the tears and dedication of workers who contributed otte Group conducted a regular intensive restructuring of the two compa- to Samsung Electronics' remarkable Lyear-end executive reshuffle at nies. Kim Kyo-hyun, head of the Chemi- growth. The first step towards a world- its 35 affiliates in the distribution, food, cal BU, will also serve another term. class 100-year-old company is to look chemical and hotel sectors on Nov. 26. Hotel BU President Lee Bong-chul, who up to workers and recognize labor union The group reduced the number of was appointed in March 2020, stayed activities, so this meeting should be a executives by 20 percent compared with his job. Lee faces the task of listing historic one," Kim stressed. to 2019. It had about 30 percent of the Hotel Lotte on the stock market. For the first time, the four labor executives step down and limited the Meanwhile, Lotte has reduced the unions of Samsung Electronics formed number of newly appointed executives to level of executive positions from previ- a joint negotiation team through the pro- only 10 percent of the total. As a result, ous six to five, and reduced or abolished cess of selecting their representatives. the number of executives shrank by age and service year limits for annual They are represented by the Federation about 100. promotions. It allows the appointment of Korean Metalworkers' Trade Unions, It is notable that a large number of of young talents as CEOs. With the abol- the umbrella organization for Samsung young executives have been promoted. ishment of age and service year limits Electronics’ fourth and largest labor Yet the heads of three of the group’s four for presidential posts, vice-presidents union, at the collective bargaining talks. business units (BUs) were retained. Lee can be promoted to presidents in a year. The other three unions are not affiliated Young-ho, the head of the Food BU, was Two deputy director positions have been with an umbrella organization. the only exception. However, the num- merged into one deputy director position. The one-hour meeting was held in ber of CEO-level replacements decreased "In this personnel reshuffle, many a relatively amicable atmosphere. "The compared to 2019. In 2019, 22 new young executives in their early 50s have labor and management both showed CEOs were appointed but in 2020, the been appointed as CEOs,” Lotte Group their willingness to make this negotiation figure dropped to 13. said. “It reflects chairman Shin Dong- process successful," said Jin Yoon-seok, Kang Hee-tae, vice president of the bin's determination to overcome the cri- chairman of the National Samsung Elec- Distribution BU, who doubles as the sis by deploying young managers who tronics Workers' Union (the fourth union) CEO of Lotte Shopping and Lotte Asset can quickly grasp the needs of the market after the meeting. "We had meaningful Development, has retained his post. and actively find new growth engines on talks in a good atmosphere." Kang received a good evaluation for his the front lines."

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Discount Sales of Over 6 Mil. Rocket Jikgu Products an average of 3-4 days, and even in the case of isolated regions, products can be Coupang to Discount Direct Purchase received within 7-10 days. Directly imported goods curated by Deals up to 55% in Black Friday Coupang can also be ordered through By Choi Moon-hee Rocket Delivery. This applies to about 100 products from various brands such popular health foods. as Xiaomi, Quest Nutrition, and Stanley, Rocket Jikgu will offer about 6 million which are on sale at discount of up to 54 units in nine categories including health percent. For instance, 50 packs each of food, beauty, home interior and electronic/ barbecue and sour cream flavored potato digital appliances, from famous brands chips can be purchased for around 8,000 such as Samsung TV, Dyson and Now won, and the Xiaomi Bluetooth ear- Foods. Also, Coupang is cutting prices by phone Air2 SE is available for around oupang will hold a "Black Fri- up to 55 percent and giving away coupons 19,000 won. Cday" special promotion to offer worth up to 20,000 won depending on the "This promotion is for Custom- overseas direct purchase and direct purchase amounts. Every day during the ers who want to make foreign direct imported products at up to 55 percent off promotion, there will be a time discount purchases of brand name products for their regular price from Nov. 26-29. at 11 a.m. and a new additional discount Black Friday” said Jonathan Burks, The discounts apply to Coupang's opportunity. One example is Samsung senior director of global e-commerce for Rocket Jikgu service that offers direct Electronics' Smart TVs, which can be pur- Coupang, said, adding, “A lot of people purchasing of foreign goods and overseas chased at 30 percent off as part of the 11 will feel sad about not being able to go products imported without any middle- a.m. daily time discount. abroad this year due to the Covid-19 pan- men. Coupang has carefully curated a One of the big advantages is fast demic, but we hope they will still be able global selection of electronic and digital delivery. Members of Rocket Wow enjoy to have a satisfying experience by buying products such as TVs, Bluetooth head- free delivery of any product. Deliveries imported goods at reasonable prices and phones and Instax cameras, as well as of overseas direct purchases usually take fast delivery."

To Produce Hydrogen Using Wind Energy Doosan Heavy Industries to Verify Green Hydrogen Technologies in Jeju Island

By Jung Min-hee

Jeju Energy Corp. to verify green hydro- Island does not have a hydrogen charg- gen production, storage and utilization ing station yet, so it will take some time technologies. Green hydrogen refers to to actually use it. The total project cost hydrogen that is created with no carbon is about 20 billion won, and the project emissions in the production process. It is period is until December 2022. the first project in Korea to verify wind In this project, Doosan Heavy Indus- power-based full-cycle green hydrogen tries & Construction is responsible for technologies. the integrated design and management of A wind power farm in Dongbok and Bukchon in Jeju Island The verification project will take the entire hydrogen plant, including the place at the Dongbok and Bukchon wind production, compression, and storage of oosan Heavy Industries & Con- farms in Jeju Island. Doosan will build hydrogen. It is also responsible for devel- Dstruction will build a system to a system to make an average of 200 oping an energy management system produce hydrogen with wind energy in kilograms of hydrogen per day by using (EMS), software that controls energy flow. Jeju Island. 3MW of electricity generated by wind In May, Doosan Heavy told creditors it The company announced on Nov. power. This is enough to charge nine would restructure itself as a company spe- 25 that it has signed an agreement with hydrogen buses every day. However, Jeju cializing in eco-friendly energy.

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Aggressive Facility Investment to Continue Next Year SK Innovation Taking Aim at 3rd Place in Global Electric Vehicle Battery Market By Michael Herh

K Innovation is growing rapidly batteries for about 200,000 EVs. Its prod- Sin the electric vehicle (EV) battery ucts are expected to go to Dongfeng Yueda SK Innovation officials show the company's battery market through aggressive investment. Kia, Kia Motors' joint venture in China. products. It increased its production capacity five The plant boosted SK Innovation's times in a year, chasing the world’s top battery production capacity by 50 percent capacity of 9.8 GWh. If these plants are three battery makers –- Korea’s LG Chem, from 20 GWh to 30 GWh. Compared built as planned, the company’s produc- China’s CATL and Japan’s Panasonic. SK with a year ago, the figure has increased tion capacity will increase to 85GWh Innovation set the goal of overtaking Pan- nearly fivefold. SK's production capacity in 2023, surpassing Japan's Panasonic asonic and becoming No. 3 by 2023. has become similar to that of Samsung (73GWh). SK Innovation has recently com- SDI (33 GWh), which ranks fourth after There is also the possibility of SK pleted the construction of a battery plant the world’s top three battery makers. Innovation establishing a joint venture (JV) in Yancheng, China with a production SK Innovation will continue its with Volkswagen in Germany. Volkswagen capacity of 10 GWh. The plant started its aggressive facility expansion in 2021. selected SK Innovation as a battery sup- full-scale operations in November. The new plants that will go into opera- plier for its sports utility vehicle “ID.4.” SK started the construction of the tion by 2022 include a second plant in Until now, SK Innovation has been Yancheng plant at the end of 2019 in Yancheng, China, the first and second employing the strategy of build a plant preparation for an expected surge in bat- plants in Georgia, the United States with after receiving orders, but it is planning tery demand in China. It invested US$1.5 a capacity of 21.5 GWh, and the sec- to make preemptive investments starting billion to build the plant, which can supply ond plant in Hungary with a production 2021.

Accelerates Penetration into Vietnamese Market LF Hazzys Opens 5th Store in Vietnam, with 6th Store Due to Open in Dec.

By Choi Moon-hee

F's traditional casual brand Hazzys department store. The new Hazzys store in Ho Chi Minh City Lannounced on Nov. 18 that it has In mid-December, the 6th Hazzys recently opened a store in Ho Chi Minh store in Vietnam will be opened on the namese market grew about 50 percent on City, Vietnam. The store is the brand’s sec- first floor of Landmark 81, the tallest year as of the end of October 2020. ond store in the city and fifth one in Viet- building in Vietnam which is located in Based on the huge domestic market nam. The company’s third store in the city a new rich village of Ho Chi Minh City. with a population of nearly 100 million, is scheduled to open next month. The Landmark 81 area is considered a Vietnam has recorded an average annual The newly opened store is located rising commercial zone with excellent economic growth rate of more than 6 at Takashiyama Department Store in the potential to attract consumers as it is percent over the past 10 years. According core business district of Ho Chi Minh close to high-end apartments, hotels and to KOTRA, young people aged between City. It is a general store that can perfect- luxury tourist facilities. 15 and 34 who account for about 34 per- ly show the identity of Hazzys as a total Hazzys entered the Vietnamese mar- cent of the total population are emerg- brand. It will showcase Hazzys portfolio ket for the first time by opening a store ing as key consumers in the Vietnamese of products ranging from as clothing for at Lotte Department Store in Hanoi at the market. The Vietnamese market is turn- men and women and golf wear to acces- end of 2017. Until 2019, LF operated a ing into a more attractive market by an sories. The story is 82 square meters in total of four Hazzys stores in Hanoi and increase in the Vietnamese people, the floor space and located in the premium Ho Chi Minh City, strengthening its elevation of their consumption level and clothing zone on the second floor of the brand position. Hazzys' sales in the Viet- the expansion of the middle class.

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A 5-year Contract Valued at Hundreds of Billions of Won LS Cable & System Strikes Submarine Cable Supply Deal with Orsted By Jung Min-hee

cooperative relations with Orsted by par- The new Hazzys store in Ho Chi Minh City ticipating in cable installation projects for the offshore wind farms that Orsted devel- Based on the successful settlement oped in Britain and Taiwan. of its brand in Hanoi, the capital of Viet- "Even in the midst of the COVID- nam, and Ho Chi Minh City, an eco- 19 pandemic, countries are continuing to nomic hub, Hazzys plans to accelerate its invest in new and renewable energy proj- LS Cable & System officials at LS Tower in Anyang, penetration into the Vietnamese market, Gyeonggi Province, Korea hold an online meeting with ects," said Myung Noh-hyun, CEO of LS where demand for high-end casual wear their counterparts at Orsted in Copenhagen, Denmark Cable & System. "We are looking forward is on the sharp rise by building a total of to sign a contract on submarine cable supply. to expanding our business as we have 10 hub stores on Vietnam's major shop- S Cable & System announced on strengthened cooperation with the leader ping mall distribution network by 2021. LNov. 24 that it has signed a five- in the global offshore wind power market." Meanwhile, Hazzys has been emerg- year contract with Denmark’s Orsted, "The offshore wind power market ing as one of the leading cultural casual the world's No. 1 offshore wind power is growing rapidly around the world, brands in the Asian fashion market since developer, to supply high-voltage sub- especially in the Asia-Pacific region," starting in China in 2007. At the moment, marine cables. LS Cable did not disclose said Matthias Bausenwien, director of the fashion brand runs about 460 stores the size of the deal, but industry watchers Orsted's Asia-Pacific division. "To lead in China alone. It participated in the estimate it at hundreds of billions of won. the global market, we need reliable cable Shanghai Fashion Week in October. LS Cable & System said it has built makers such as LS Cable & System."

The World's First Oral COVID-19 Treatment Daewoong Pharmaceutical to Release Foistar Tab as COVID-19 Treatment in January 2021 By Choi Moon-hee Daewoong Pharmaceutical's head office in Seoul aewoong Pharmaceutical of the Development Division at Dae- According to a study published in Dannounced on Nov. 23 that it has woong Pharmaceutical. the world-renowned journal Cell by the completed recruiting patients for a second- The COVID19 virus needs to stick to German Primate Center in Germany, phase clinical test of Foistar Tablet being human cells as the first step to proliferate less than one micromole (uM) of camo- developed as a COVID-19 treatment. within the human body after penetrating stat, the main ingredient of Foistar Tab- The clinical trial will be led by Oh it. Camostat, the main component of Foi- let, inhibits 50 percent of cell infections. Myung-don, an infectious medicine profes- star Tablet, suppresses viral growth by This means that camostat impedes cell sor at Seoul National University. Express- preventing this attachment process. infections at a concentration tens to hun- ing thanks to researchers who assisted When administered to patients with dreds times lower than other drugs being in patient recruitment, Oh said he would COVID-19 as quickly as possible, Foi- developed as COVID-19 treatments such speed up the clinical trial to help develop star Tablet can prevent symptoms from as Remdesibir. the world’s first oral COVID-19 treatment. worsening. At the same, when adminis- Meanwhile, Daewoong Pharmaceu- "As clinical results are expected to tered to people who made close contacts tical is also carrying out a global clini- come out within 2020, we will cooperate with COVID-19 patients, patients show- cal trial of Foistar Tablet after signing a with the government to ensure that the ing COVID-19 symptoms or people in joint research agreement with the Institut drug is approved for emergency use in self-isolation, the drug can prevent the Pasteur Korea and the Korea Institute of January 2021," said Park Hyun-jin, head virus from penetrating into cells. Radiological and Medical Sciences.

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Over 6,500 People Preregister for the Conference Samsung SDS Showcases Digital Innovation Technologies at Techtonic 2020 Developer Conference By Kim Eun-jin

This year, the conference was live- logistics) optimization that was adopted streamed online due to COVID-19. The in ‘NeurIPS 2020’, and improved AI per- Korean developer community showed formance on Korean language recogni- high interest with more than 6,500 peo- tion. ple pre-registering for the conference, NeurIPS, short for Neural Informa- which is more than twice as many as last tion Processing Systems, is an annu- year. al meeting to foster the exchange of “We prepared the conference togeth- research on neural information process- er with the universities and partner coming systems. panies to share the latest technologies Along with various showcases, the WP Hong, president and CEO of Samsung SDS speakers from companies in coopera- speaks at Techtonic 2020 Developer Conference, and use cases,” said, WP Hong, president which was held online on Nov. 12. and CEO of Samsung SDS. “I hope this tion with Samsung SDS also delivered conference contributes to the developer insightful presentations. Jeong So-young, amsung SDS hosted Techtonic community.” a leader at NVIDIA Korea, gave a speech S2020 Developer Conference Then, Professor H.T. Kung, a schol- on ‘‘Strategy to build an effective GPU on Nov. 12. Started in 2018, Techtonic ar in AI field at the Harvard University, data center for large-scale AI research’ is a conference to share the latest tech- gave a keynote speech on ‘COVID-19 while Park Sung-woo, a leader at NHN, nologies, development know-hows and and the future of AI Technology.’ shared information on ‘Open stack for insights to support the expansion of Following was the introduction of large-scale cloud services’. developer ecosystem. technological use cases by Samsung SDS The developers also showed keen Techtonic 2020 was prepared under AI experts. Various achievements were interest at the outcomes on quantum the theme of ‘Digital innovation leading presented including visual deep learning- computing research that was jointly con- the new normal era’ and consisted of 20 based eye disease prediction, research ducted with Korea Advanced Institute of sessions including artificial intelligence, outcomes on reinforced learning for Science and Technology (KAIST) and cloud, quantum computing and security. process (product design-manufacturing- Kookmin University in Korea.

Affiliates Collaborate to Complete the Deal Shinhan Financial Group Successfully Arranges Acquisition Financing

By Yoon Young-sil

he global investment banking and Japanese business units of the U.S. Tarm of Shinhan Financial Group closure manufacturer. The global invest- announced on Nov. 10 that it has suc- ment banking arm of the group arranged cessfully arranged a US$120 million US$120 million, equivalent to 27 percent acquisition financing for a deal involv- of the total financing. ing Closure Systems International of the “The subsidiaries including Shin- United States. han Investment Corporation, Shinhan The project was for a corpora- Bank and Shinhan Capital collaborated tion established by American private in a highly organized way to complete Shinhan Financial Group has successfully arranged a equity firm Cerberus Capital Manage- the deal in spite of difficulties caused by US$120 million acquisition financing for a deal involving Closure Systems International. ment to take over the North American COVID-19,” the group explained.

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20 Premium Red Ginseng Skin Care Products Sold on Amazon Donginbi of Cheong Kwan Jang Now Available on Amazon.com By Choi Moon-hee

onginbi, Cheong Kwan Jang's Cheong Kwan Jang has developed, name- Dpremium red ginseng cosmet- ly "red ginseng oil," "red ginseng liquid," ics brand, is now available on the world's and "red ginseng condensate." Thus, the largest e-commerce platform Amazon. skin care lineup fully delivers red ginseng Korea Ginseng Corp. (KGC) efficacy to skin. The Donginbi Skin Care "A Donginbi store on Amazon offers announced on Sept. 28 that it has opened Lineup differentiated itself from tradi- a golden opportunity to promote the a store on Amazon.com to target U.S. tional herbal cosmetics by realizing “red excellence of Korea's famous red gin- consumers who are interested in K-beau- ginseng for application to skin.” seng cosmetic products globally amid ty and herbal cosmetics. Amazon is a With the recent expansion of online the rising status of K-Beauty in the U.S. global online commerce website used by consumption trends in the cosmetics market," said Lee Jung-hoon, head of the more than 300 million people in more market due to the COVID-19 pandem- Cosmetics Business Division at KGC. than 180 countries. In particular, it enjoys ic, more and more K-Beauty brands are "Starting with our store on Amazon, we a unique position in the U.S. market. entering the global e-commerce market. will continue to expand our presence in Donginbi will sell a total of 20 skin- Through its listing on Amazon, Donginbi the global e-commerce market to broad- care products including its flagship prod- has secured a strong online sales chan- en our customer base abroad." uct "1899 Single Essence," "1899 Sig- nel in the U.S. market. In the future, the Meanwhile, KGC's Cheong Kwan nature Oil" and "Natural Raw Liquid company plans to expand the number of Jang brand opened a store on Amazon in Essence," at its Amazon store. All prod- products available on Amazon so that 2015 and has since been selling 40 kinds ucts in the Donginbi Skin Care Lineup local consumers will be able to experi- of ginseng products, including Everytime contain the three key ingredients that ence a wide array of Donginbi products. and Red Ginseng Drink.

For Providing Unwarranted Support to Majority Shareholder Disciplinary Measures Taken Against Hanwha Life Insurance By Choi Moon-hee

he Financial Supervisory Service alties in relation to the lessee and 0.8 has issued a warning to Hanwha billion won in maintenance costs. The The Financial Supervisory Service has issued a warn- T ing to Hanwha Life Insurance. Life Insurance and imposed a fine of Financial Supervisory Service’s warning approximately two billion won. In addi- and fine are because of the eight billion Financial Supervisory Service, this consti- tion, it reprimanded three executives and won provided by the insurance company. tutes tangible and intangible assets given nine staff members. It explained that the construction costs to a subsidiary for nothing, which is a vio- Hanwha Galleria Timeworld, which were the company’s assets and not pro- lation of the Insurance Business Act. owned 48.3 percent of the insurance com- vided for nothing. It also said that Hanwha Life Insur- pany, obtained a duty-free business license The Financial Supervisory Service ance paid reduced or no insurance money in 2015 and then unilaterally chose a part called transactions with a subsidiary into regarding 4,734 contracts from January of the insurance company’s 63 Building question, too. The insurance company 2015 to May 2019 to keep more than two for its duty-free business. At that time, a paid building management costs to 63 billion won out of over 4.7 billion won. lessee was using that part of the building. City, a subsidiary agency, and the payment As a result of its disciplinary measures, As a result of the major shareholder’s included approximately 1.1 billion won the insurance company now cannot decision, the insurance company paid in contributions to Hanwha Group’s non- launch any new business for one year to 16.7 billion won in construction costs, profit foundation irrelevant to the build- come if the launching requires permis- 7.2 billion won in contract breach pen- ing management service. According to the sion from the authorities.

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Wins Global Recognition for Technology and Marketability BlueVisor Takes Second Place in Fintech Unicorn Battle in Asia By Kim Eun-jin

lueVisor, a member company addressed their questions in the final Bof Born2Global Centre, placed round, which was streamed online. Over second in the latest Fintech Unicorn 40 investors from R3i Ventures and other Battle in Asia, receiving recognition for companies participated as judges. its technological prowess and business BlueVisor introduced a proposal for viability. its flagship item HIGHBUFF, an AI asset The Fintech Unicorn Battle in Asia is management platform, which was highly BlueVisor is ranked second in the latest Fintech a global pitch competition organized by rated for its concept, potential market, Unicorn Battle in Asia. Startup.Network. It provides an oppor- and competitiveness by judges. It won into a global fintech company.” tunity for investors to discover competi- second place in the overall vote. In addition to the existing AI asset tive startups and an opportunity for such Hwang Yong-guk, CEO of Bluevisor, management platform HIGHBUFF, startups to attract investment and enable and Hong Seo-yeon, CMO of Bluevisor, BlueVisor has launched HIGHBUFF their global growth. said, “Placing second in a competition for Interview, an AI interview solution that The competition was divided into promising global technology companies allows objective interviews in the age four categories: fintech, AI, healthtech, in AI, IoT, fintech, logistics, and other of contact-free communication. Further, and other technologies. Over 1,800 areas, means that we’ve received interna- the company has developed I.EARN, an companies from 125 countries around tional recognition for our technology and AI content management solution, and is the world participated, and about 200 marketability. Through this competition, working on marketing these solutions, advanced to the main competition. international investors now know BlueVi- which are establishing themselves in the Selected as one of the top 10 com- sor, and we are now presented with industry as products that limit human panies in the fintech category, BlueVi- opportunities to partner with other fintech risk and offer time-saving and other sor presented its plan to the judges and and IT companies. We hope to develop material benefits.

Startup Develops Innovative Vehicle Speeding Alarm System Quantum Gate Gearing up for Global Debut through Successful Entry of Quantum Gate CI Public Market online market, G2B. The product was By Jung Min-hee also included in the Ministry of SMEs uantum Gate, a Korean startup of diverse quality certification standards and Startups’ trial purchasing program Qthat specializes in smart traffic (convenience, safety, reliability, expand- for technology-based products and des- safety solutions, has been authorized by ability, etc.) that have to do with the cred- ignated as an Outstanding R&D Prod- the Korean government to sell its intel- ibility of technology and services in the uct of Innovation. So far, Quantum Gate ligent vehicle speeding alarm system, info-communications convergence sector. has passed the stringent requirements of UXDFS (User Experience Intelligent By adding an ICT quality certification to its Korean government-affiliated institutions Driver Feedback System). Quantum Gate GS (grade 1), electromagnetic wave, water- (assessment, trial project, trial purchas- is a member company of Born2Global proof, and durability certifications, Quan- ing) to establish a solid base for selling Centre and Sejong Technopark. tum Gate has firmly established UXDFS as and installing its products. Quantum Gate recently gained ICT a product of outstanding quality. UXDFS is a vehicle speeding alarm Convergence Product Quality Certification UXDFS was also regarded by system that informs the driver of the (for 4 product categories, total: 16 models) the Public Procurement Service as a potential danger of any given area through from the Ministry of Science and ICT. Cer- “Revolutionary Procurement Product which he/she is passing by making extrap- tification is given based on an assessment by a Startup” and is listed in the PPS’ olations using data on speed limits, road

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conditions, and the histories of accidents A Partner for Over 30 Organizations in and in both child and pedestrian protection Outside of Korea zones as well as accident-prone areas to encourage the driver to slow down. Based on situational awareness computing, the Autonomous Vehicle Simulation system monitors a diverse aggregation of Startup MORAI Closes road situations through a cloud platform to prevent traffic accidents from occurring US$1.8M Series A Funding Round on highly trafficked urban roads. Jointly developed with the Korea By Michael Herh Electronics Technology Institute, UXDFS is a convergence-based traffic control solution that uses an intelligent assessment of the circumstances of any given situation to provide the following functions:

- Multi-dimensional analysis of traffic situations - Traffic accident warning system - Experience/perception of danger, UX - OneM2M, big data - Situational awareness computing - Linking with integrated smart city platform - Self-driving support V2I

Back Ju-yong, CEO of Quantum Gate, said, “We are getting calls from traffic infrastructure companies that are in charge of traffic-related construction MORAI’s autonomous vehicle simulation reconstructs complex scenarios in a 3D environment – allowing engineers in smart cities as well as calls from con- to test their systems before deployment. sulting firms. At the moment, we are trying to figure out how to apply our prod- ORAI, Inc., a member com- MORAI's simulation software and the uct to traffic infrastructure design for Mpany of Born2Global Centre company's efforts to scale their platform. large cities. Now that we have entered and Sejong Technopark, has success- MORAI plans to reach out to interna- Korea’s public market with this ICT fully secured US$1.8 million in Series tional customers and partners, building product after evaluations by multiple A funding round. The round includes on efforts earlier this year, in which the institutions, we believe that the quality investment from Kakao Ventures and company completed multiple proof of of our technology has now been suffi- Korea Credit Guarantee Fund (KODIT) concept programs, joined the Automat- ciently recognized within South Korea. It as well as from an existing investor ed with Velodyne program in May, and is now time to expand our business areas Naver D2SF (Naver D2 Startup Fac- opened a branch office in San Francisco to enter foreign markets.” tory). in July. Quantum Gate is engaged in nego- MORAI delivers testing solutions "That some of the leading IT com- tiations with not only traffic infrastruc- based on their simulation platform built panies in Korea have joined us and now ture companies that are responsible for for the verification and validation of share our vision of safety is a great moti- traffic-related construction in smart cit- autonomous vehicles. Providing engi- vator," said Jung Ji-won, CEO and co- ies, but also relevant consulting firms neers with a wide range of simulation founder of MORAI. He added, "We plan on applying UXDFS to Korea’s traffic environments that vary from complex to continue accelerating our growth, infrastructure design. Discussions are city streets to warehouses and shipping while focusing on further developing also underway with defense contractors yards, MORAI's solutions help custom- our technology and building a product in Dubai and Turkey. ers test even the most complex edge that can help make safe autonomous To hear about Quantum Gate's tech- cases efficiently. Since their initial seed vehicles a reality." nology, participate in the online seminar funding round, MORAI has started part- To hear about MORAI's technology, "Mobility Startup Pitch Event@Born- nerships with more than 30 different participate the online seminar "Mobility 2Global Centre" held for global business organizations in and outside of Korea. Startup Pitch Event@Born2Global Cen- exchange from 2:00 p.m. KST on Nov. The new round of investment tre" held for global business exchange 27. will help continued development of from 1:00 p.m. KST on Nov. 27.

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A Photoelectrode for Solar Hydrogen Production UNIST Develops Improved Organic Semiconductor-based Photoelectrode By Choi Moon-hee

he Ulsan National Institute inorganic semiconductors have been con- Tof Science and Technology ducted with regard to photoelectrodes. Mimetic diagram of organic semiconductor-based (UNIST) announced on Nov. 9 that its In the meantime, organic semiconductor photoelectrode and solar hydrogen production research team has developed a high-per- materials, which are higher in hydrogen formance and high-stability photoelec- production efficiency, have not been used reaction. In addition, the liquid metal trode with a module system that effec- as photoelectrodes due to their vulner- between the foil and the semiconductor tively protects an organic semiconductor ability to water. blocks water without blocking the flow material from water. The research team, however, suc- of charged particles. A photoelectrode for solar hydrogen ceeded in producing the organic semi- The research team explained that the production is made of a semiconductor conductor electrode that is highly stable hydrogen production efficiency of the material that produces charged particles in water by using the module system photoelectrode is 4.33 percent, more than by absorbing solar energy. The particles composed of a liquid metal, a nickel foil twice those of existing inorganic semi- react with water on the surface of the and a catalyst grown directly on the foil. conductor photoelectrodes. Details of electrode, and then hydrogen and oxygen The nickel foil prevents direct con- the research are available in the Nov. 2 are produced. Since this reaction occurs tact between water and the organic semi- edition of the Nature Communications in water, researches on stable metal oxide conductor and the catalyst assists in the journal.

Overly Reactivated Star-shaped Cells Cause AD Korean Researchers Shed New Light on Cause of Alzheimer's Disease By Choi Moon-hee

orean researchers have found loid beta in the brain. Treatments have Nerve cell annihilation and AD angiogenic induction by Kthat overly reactivated star- been developed to get rid of amyloid severe reactive astrocytes shaped cells explain the unpredictability beta, but the continued symptoms of AD of Alzheimer's disease (AD). after the removal of the substance have tive astrocytes. This finding is expected to lay the not been properly explained. Some cases The research team confirmed through groundwork for an early diagnosis of AD showed that an increase in amyloid beta a reaction control model of astrocytes and the development of new treatments. eased AD. that showed that mild reactive astrocytes The Institute of Basic Science (IBS) In addition to amyloid beta, the recover naturally, while severe reactive announced on Nov. 17 that a joint research team found that overly reacti- star cells kill nerve cells and proceed research team led by Lee Chang-joon, vated star-shaped cells, a kind of brain with dementia, making dementia impos- a director of the IBS, and Ryu Hoon, a cell, were another cause, and explained sible to cure. director of the Korea Institute for Sci- what had not been explained before. Severe reactive astrocytes release toxic ence and Technology (KIST), found that Astrocytes are star-shaped non-nervous substances during their activity process. In severe reactive astrocytes destroy nerve cells which have the largest number order to eliminate them, the human body cells and set off and deepen AD. The among cells in the brain, and serve to makes hydrogen peroxide, a disinfectant. research results were published in Nature maintain brain constancy. When brain The more severe reactive astrocytes are Neuroscience, a sister journal of Nature. diseases including AD occur, the num- generated, more hydrogen peroxide is AD has been known to be a disease ber and size of astrocytes grow and their produced, which can cause negative side ignited by toxic substances such as amy- functions change, turning them into reac- effects that kill even nerve cells.

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20 Times Less Expensive Much Less Expensive Hydrogen Production Catalyst Developed by IBS

By Choi Moon-hee

At present, electrolysis is the only hydrogen production method that causes no carbon dioxide emissions. During the course of H2O splitting into H2 and O2, however, oxygen generation has been very slow to slow down the overall process and affect productivity. Although RuO2 and IrO2 have been used for faster production, the prices per kilogram are over US$70,000 and their durability is less than 24 hours. The research team developed the catalyst by adding oxygen atoms to a cobalt-iron alloy and a trace amount of ruthenium. The team confirmed that the catalyst is durable for at least 100 hours and capable of generating oxygen with a much lower voltage. “The current density increases along with the oxygen generation rate and existing RuO2 catalysts require 298 millivolt to A Korean research team has developed a water-splitting catalyst that is 20 times less get a current density of 10 milliampere per square centimeter,” expensive, six times more productive and at least four times more durable. the team explained, adding, “Our catalyst, however, requires he Institute for Basic Science announced on Nov. 24 180 millivolt and this means water can be split with a lower Tthat its research team developed a water-splitting cata- voltage and the catalyst is more energy-efficient.” lyst that is 20 times less expensive, six times more productive Details of the research are available in the Nov. 4 online edi- and at least four times more durable. tion of Energy & Environmental Science.

Operates 100,000,000°C Plasma for Over 20 Seconds South Korea’s Artificial Sun Sets New Record

By Yu Kun-ha

he Korea Institute of Fusion Energy (KFE) Tannounced on Nov. 24 that it succeeded in operating 100,000,000°C plasma, which is a core condition for nuclear fusion, for at least 20 seconds. The duration is a world record. In 2019 and February this year, the institute succeeded in operating the ultra-high temperature plasma for eight seconds or more. At present, the nuclear fusion research institutes of the other countries including China have yet to maintain the same type of plasma for 10 seconds or more although they are capable of realizing it for a very short moment. The KFE accomplished its goal by improving the performance of the internal transport barrier. The KFE’s new goal is to maintain the operation for 300 Vacuum chamber of the Korea Superconducting Tokamak Advanced Research (KSTAR) facility seconds by 2025. “The duration of 300 seconds means being capable of controlling the instability of nuclear fusion-based tinue with our challenge to realize nuclear fusion energy, which power generation,” it explained, adding, “We are going to con- is a goal of the entire human race.”

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School Helps Students and Parents Cope with Pandemic Dulwich College Seoul Builds up Expertise in Blended Learning, New Head of College Says By Choi Moon-hee

The COVID-19 pandemic has posed How has your transition to Korea ensure that every student not only ful- unprecedented challenges to students been? How do you like it so far? fils their potential but exceeds it. At the and teachers around the world. My wife and I are here in Seoul with same time, it is important to engage in Students in a large number of our two children. We have come from meaningful initiatives that focus on sus- Norway where I was the head of the tainability and community wellbeing. countries are still affected due to United World College Red Cross Nor- This current pandemic has brought these school closures. In Korea, the dic. The contrast with Norway couldn’t issues into sharp focus across the globe. situation is a bit better. Yet teachers be sharper! From the fjords, mountains We want all of our community mem- are in an uphill battle to prevent the and forests to the hustle and bustle of city bers to feel a real sense of belonging and quality of education from life. And what an extraordinary city this connectedness to the College – a place deteriorating. Gudmundur Jonsson, is. We have been made to feel very wel- where they feel safe, nurtured and sup- the new head of Dulwich College come and are hugely impressed by Seoul. ported. A home away from home. Seoul, also faces the problem. I don’t think I have lived in a cleaner, Yet the school, he says, has built up safer city, and I love the numerous trails What is your education philosophy? considerable expertise in the area of and green areas throughout the city. We In essence, it is very simple. I believe blended learning over these last still haven’t managed to get out of the that young people grow and thrive best months. Many of its staff attended city – I cannot wait to explore the moun- when given the opportunity to take tains, islands and coastlines of Korea. meaningful ownership of their learning summer courses with the Harvard and when given responsibility as active Graduate School of Education. How does Dulwich College Seoul citizens within their school community. Furthermore, its staff regularly differ from schools you have previously Schools will far too often promote closed collaborates with colleagues in other worked at? thinking in their drive to secure success- Dulwich network schools in Asia. Most of the other schools I have ful exam results, and this can come at In an interview with BusinessKorea, worked at have been on the outskirts of the expense of healthy growth and devel- Jonsson, an education expert from the city or in fairly isolated locations. opment. At Dulwich College Seoul we Iceland, also talked about how the The central location of our campus want our students to develop their con- school, which has students aged 4 to adds a level of energy and vibrancy to fidence and sense of purpose through 18, helps students and parents cope our College, and it feels very connected the holistic education we offer. I want with the impact of the pandemic. to our locality – it is also wonderful to students to be excited about going to He also explained his educational have the river so close to us. Being part school and to feel empowered to develop of a family of Schools and Colleges a healthy, balanced lifestyle. Academic philosophy and vision for Dulwich across Asia also provides us with numer- learning is important, but strong learning College Seoul. Here are excerpts ous opportunities for collaboration and also comes from play, collaboration and from the interview. – Ed. growth for our community members. risk-taking.

What is your overall vision and plan The mental health of students is a for Dulwich College Seoul both short and major concern these days as a result of long-term? COVID-19. How is Dulwich helping the stu- We continue to strive for academic dents and parents to cope? excellence in all that we do. We want to The current pandemic has high-

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Samsung Group's governance change is expected to take time. lighted and exacerbated the complex a clear idea of who they can speak to expertise being developed here at the mental health challenges faced by stu- whenever they may feel unsafe or wor- College. This has also been a key focus dents around the globe, particularly for ried. We are also fortunate in having a for our family of Schools and Colleges, students in the 14-19 year age range. It strong team of Counsellors and Learning and this is where the real power of being is clear that our community has been Support specialists, and they proactive- part of a group comes into play. Our staff impacted by this pandemic, and for many ly reach out to students on a day-to-day regularly collaborates with colleagues of us we do not fully comprehend how basis. across Asia. this has impacted our senses of identity, This situation has also raised con- security, stability, belonging and pur- What do you think needs to be done to cerns around the structures surrounding pose. It is important that we support and mitigate the negative impacts of the pan- public examinations, with significant nurture the wellbeing of all community demic on learning? issues coming to light around the issu- members in order to foster a sense of This has been an incredibly dynam- ing of exam results for recent graduates belonging and cohesiveness. ic situation, and we have had to make worldwide. This continues to be an area We have an extensive support net- numerous changes over these past weeks of development across the globe and it work for our students. Every member of as new and updated mandates come is clear that individual schools and, ulti- staff is there to support our young people through from the authorities. What is mately, teachers, need to be given more in their growth and learning. Each stu- clear is that we have built up consid- ownership of the assessment process. dent also has a Tutor or Class Teacher erable expertise in the area of blended There are real opportunities for making who checks in with them on a regular learning over these last months. Many of positive changes and it is exciting to be basis. In addition, all of our teachers and our staff attended summer courses with part of the Dulwich College International students receive extensive safeguarding the Harvard Graduate School of Educa- team in driving forward some of these training. This means our community has tion, and it has been exciting to see this developments.

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Export Destinations Becoming bought 23,167 apartments in South Korea Increasingly Diverse from 2017 to May this year and the total value of such transactions jumped from 1,789.9 billion won to 2,397.6 billion won Kimchi Exports from 2017 to last year. In this period, a total from South Korea of 23,219 foreigners bought apartments in Increasing Rapidly South Korea, including 13,573 Chinese. By Choi Moon-hee South Korea’s kimchi exports for the first three quarters of this year increased 38.5 percent from a year ago. he Ministry of Agriculture, Food taining that kimchi originated from itself. Producing Beer with Solar Energy Tand Rural Affairs announced “China has done so for 10 years,” said on Nov. 23 that South Korea’s kimchi a domestic food manufacturer, adding, Oriental Brewery exports for the first three quarters of this “Storing pickled vegetable has been all year totaled US$108.49 million, up 38.5 around the world for thousands of years to Do Business in percent from a year ago. For reference, and what China maintains is groundless.” a Greener Way the total annual exports were US$104.99 The World Institute of Kimchi also By Choi Moon-hee million last year. said that China’s contention is based on the The export destinations are becoming Book of Odes mentioning a pickled cucum- increasingly diverse, too. At present, the ber dish, China is maintaining based on this exports are going to 82 countries world- part that pickled vegetable dishes originated wide whereas no less than 80 percent of from itself, and yet such easy dishes can- the exports went to Japan eight years ago. not be original. “Moreover, Korean kimchi Japan’s ratio has decreased by approxi- comes with various seasonings in addition mately 30 percentage points in eight years. to pickling and is unique in that it entails In the meantime, China is still main- lactic acid fermentation,” it explained. Oriental Brewery will produce beer with solar energy generated at beer production facilities. riental Brewery signed a memo- Orandum of understanding on Nov. Koreans Complaining about Foreigners' Growing Land Ownership 23 with KEPCO Energy Solution and Aeo- nus to produce beer with solar energy gen- Chinese’ Land Ownership in South erated at beer production facilities. Korea Increasing Rapidly Specifically, KEPCO Energy Solution By Choi Moon-hee will install solar power generation equipment at three facilities of Oriental Brewery he Ministry of Land, Infrastructure and Aeonus will run the equipment. The Tand Transport and Statistics Korea project will start in Gwangju next month. announced on Nov. 16 that land owned The annual use of solar power to that by foreigners increased from 71,575 lots end is expected to reach 12 GWh and (190,550,794 square meters) to 147,483 the resultant reduction in carbon diox- lots (248,666,253 square meters) from ide emissions is estimated at 5,621 tons 2011 to 2019 and the official price of the a year. Oriental Brewery is anticipating land rose from 24,995.7 billion won to an electricity supply of 343 GWh and 30,775.8 billion won in that period. Chinese-owned land lots in Jeju 160,000 tons of reduced carbon dioxide Especially, that owned by Chinese cent to 8.38 percent on a price basis. emissions for 30 years of operation. showed a substantial increase from 3,515 More and more South Koreans are The project is the first implementa- lots (3,695,166 square meters, 765.2 bil- complaining about the increasing land tion of RE100 in South Korea. RE100 is lion won) to 50,559 lots (19,302,784 ownership of foreigners. “No South Kore- a global campaign for replacing 100 per- square meters, 2,580.4 billion won). Their an can own land in China and laws have to cent of corporate electric power sources ratio to all foreign landowners increased be made right away so that Chinese’ spec- with renewable energy by 2050 and more a lot, too. Specifically, the ratio jumped ulative real estate investments in South than 260 companies have joined the cam- from 4.91 percent to 34.28 percent on a Korea can be blocked,” a citizen said. paign so far worldwide. AB InBev, the lot basis, from 1.93 percent to 7.76 per- The National Tax Service also global HQ of Oriental Brewery, is aiming cent on an area basis, and from 3.06 per- announced on Nov. 16 that foreigners to attain the goal by 2025.