SK hynix developed a 2Tb device with double the capacity of existing solutions. To address potential performance degradation in large-capacity NAND, the company increased the number of planes2, independent operation units within a chip, from 4 to 6. This enables greater parallel processing and significantly enhances simultaneous read performance.(PHOTO: SK Hynyx)
Among South Korea’s top 500 firms, excluding SK Hynix, operating profits in first half 2025 fell by 1.7% YoY. Sales rose 5.5% to KRW1,655.3 trillion, while aggregate operating profit was KRW118.5 trillion. SK Hynix alone posted a record-breaking Q2 operating profit of KRW9.21 trillion, more than double from a year ago, with revenues up 35% to KRW22.23 trillion.
The first half of 2025 is projected to be a tale of two Koreas.
Strong Outperformers are companies tied to the global AI semiconductor boom (Samsung Electronics’ chip division, SK Hynix) and battery makers are expected to see record-breaking profits.
Stable Performers are Automakers, Hyundai, Kia. They maintained solid results, though growth may be tempered by competition and mixed global demand.
Challenged Sectors are construction, shipbuilding, and petrochemicals. They face headwinds from high interest rates and fluctuating raw material costs. The biopharma sector could see volatility.
Semiconductors & Tech sector is expected to be the brightest spot in the Korean economy.
In broader industry context, South Korea held a 17.7% global semiconductor market share in 2022. By first quarter 2025, SK Hynix had overtaken Samsung in DRAM market share, commanding 36% vs. Samsung’s 34%.
Device Solutions Division (Semi-conductors) report a significant turnaround to massive profitability. The surge in demand for high-bandwidth memory (HBM) and DDR5 for AI servers will be the key driver. Their HBM3 and next-gen HBM3e products are in intense competition with SK Hynix and will capture major value.
The flagship smartphones Galaxy S25 series was main contributor. Growth is likely to be modest in a saturated market, with profitability maintained.
First quarter of Samsung Elec-tronics’ revenue reached a record KRW79.14 trillion, with operating profit slightly up to KRW6.7 trillion—though its semiconductor division declined to KRW1.1 trillion from KRW1.91 trillion a year earlier. Second quaretr, operating profit plunged 55% to KRW4.7 trillion, largely due to a sharp drop in the chip business (semiconductors down to KRW400 billion). However, the mobile division thrived with a 40% profit increase, helped by strong smartphone, laptop, tablet, wearable, and smart ring sales
Consolidated operating profit is projected to grow over 100%+ YoY, potentially reaching one of its best halves in years.
SK Hynix is undisputed leader in HBM for AI. SK Hynix alone posted a record-breaking second quarter operating profit of KRW9.21 trillion, more than double from a year ago, with revenues up 35% to KRW22.23 trillion. As the primary supplier of HBM3 to NVIDIA, SK Hynix is poised for record-high sales and profits in H1 2025.
Their technology leadership and full production capacity allocation for AI memory will make them a top performer. SK Hynix emerged as a standout, leaning heavily into AI demand with record second quarter results, extremely strong double-digit revenue and profit growth YoY.
Automotive sector, Hyundai Motor Company & Kia Corporation, can say solid but competitive. It’s performance expected to maintain stable revenue and healthy profits. Sales will be supported by a strong global lineup of SUVs and premium models.
The first half of 2025 is expected to be a period of cautious optimism and strategic transition for Korean automakers. Performance will be shaped by several key factors, EV transition acceleration is intensifying competition, especially from Chinese OEMs, and the rollout of next-generation EVs will be critical. Global economic uncertainty, like interest rates, inflation, and trade policies will significantly impact profitability. And as EV demand growth fluctuates, strong hybrid vehicle sales will remain a crucial profit pillar.
Hyundai-Kia is projected to maintain its strong global position, leveraging a diversified product portfolio. Its sales volume expected to see modest growth(2-4% YoY), driven by new model launches and strong hybrid sales. The company will likely continue to gain market share in key regions like North America and Europe. Revenue growth may outpace volume growth due to a richer product mix (more SUVs, Genesis luxury models, and higher-end EVs). Projected increase of 4-6% YoY.
The launch of new IMA-based EVs (likely including an electric Casper/Porter) will be crucial for reinvigorating electric sales. Models like the Hyundai Grandeur Hybrid and Kia Sorento Hybrid will continue to be top sellers domestically and in the U.S.
Looking at the positive side, in High-value vehicle sales, continued demand for eco-friendly cars (hybrids, EVs) are stable, but Intense price competition in the global EV market, potential economic slowdown in key markets like the U.S. and Europe, and fluctuating exchange rates. Low to mid-single-digit revenue growth with stable operating margins were forecast in this sector.
The first half of 2025 is expected to be a period of cautious recovery and strategic realignment for Korean chemical companies. The sector is likely to continue emerging from the downturn of 2023-2024, but the pace of recovery will be uneven across different segments.
In petrochemicals & basic chemicals looks gradual improvement from a low base. Revenue expected to see low-to-mid single-digit growth YoY, primarily driven by a slight increase in sales volumes rather than significant price increases.
Operating margins are projected to remain thin or show only slight improvement. Because overcapacity, weak spreads, and competition. Massive new capacity, particularly in China, continues to flood the global market for key products like ethylene, polyethylene, polypropylene, and paraxylene. The spread between product prices and feedstock (naphtha) costs is expected to remain compressed, though potentially better than the lows of 2023. And, Intense competition from Middle Eastern and US producers with cost advantages in feedstock.
In specialty chemicals & high-value materials, LG Chem (advanced materials division), Samsung SDI (materials business), SK ie technology (SKIET), Kolon Industries, SKC shows relatively strong and resilient
Revenue & profitability are expected to be the bright spot, showing stronger revenue growth and healthier margins. Performance is tied to the growth of specific high-tech industries.
Key growth drivers for first half are battery materials – cathode, anode, separators, bindings. Demand is linked to the continued global adoption of electric vehicles. While growth rates may normalize, it remains a high-growth sector.
Companies like LG Chem (cathodes) and SK ie technology (separators) ar well-positioned as key suppliers to global battery makers, but risks include potential inventory adjustments in the EV supply chain and intense competition.
Semiconductor and display materials will be the anticipated recovery in this sector. Global semiconductor industry in 2024-2025 will directly benefit this segment.
Demand for high-purity chemicals, gases, and display materials (OLED components, polarizers) is expected to strengthen, benefiting companies like Samsung SDI and Kolon Industries.
Growing demand for biodegradable plastics, recycled materials, and bio-based chemicals will provide new growth avenues. Companies investing in this “green transition” may start to see commercial scale benefits.
For Korean shipbuilders, first half of 2025 is expected to be a period of “solidifying recovery and improving profitability”. After several years of restructuring and navigating low points, the “Big Three” (HD Hyundai Heavy Industries, Samsung Heavy Industries, and Hanwha Ocean) are poised to show significantly stronger financial results, driven by a boom in high-value orders secured since 2021-2023.
The lucrative orders for LNG carriers and other complex vessels won during the boom will be physically under construction and hitting milestone payments. Dominance in the high-margin LNG carrier and eco-friendly vessel market will be the primary driver of performance. Critical focus will be on converting record-high orderbooks into actual profits, overcoming high raw material (steel) costs and fixed costs. But, labor shortages, steel price volatility, and global supply chain stability remain key risks.
Korean shipbuilders are expected to report strong YoY revenue growth in first half. Because the hulls of ships ordered in 2022-2023 will be in the mid-to-late stages of construction, triggering significant milestone payments. The revenue increase will be a direct reflection of the high value of the current order backlog.
After years of losses or razor-thin margins, profitability is projected to show a meaningful improvement in operating profit. The ships currently under construction were secured at higher, more profitable contract prices compared to the low-margin orders from the pre-2021 period. As the legacy loss-making projects are completed and delivered, the proportion of profitable new projects in the revenue mix will grow substantially.
The total backlog will remain at a high level, ensuring visibility for several years. However, the pace of new order intake is expected to normalize or slow down compared to the record-breaking years of 2021-2023. This is due to high yard capacity being filled and some cooling in new ordering activity as shipping markets normalize.
Performance will be driven by high-value vessels. LNG carriers are the backbone of profitability. Korean yards hold a dominant global market share (over 70%) for these complex, high-margin vessels, driven by demand for energy security, especially in Europe.
Container ships & PCTCs linked to global trade and the electric vehicle export boom.
While still important, ordering may cool slightly. Green technology vessels powered by alternative fuels (methanol, ammonia, hydrogen) and equipped with energy-saving technologies will be a key growth area and margin driver.
Korean shipbuilders continue to compete fiercely with China, but largely in different segments. China dominates in volume and low-to-mid-range vessels, while Korea focuses on the premium, technologically advanced segment, allowing it to maintain pricing power.★
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