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Rise of Korean Defense

August 26, 2026 by Leave a Comment
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Thanks to expanded exports to Poland and the Middle East, Orders already scheduled exceed KRW 100 trillion.

Establishing overseas local production and supply chains

The four major domestic defense companies are expected to post combined operating profits of more than KRW 1.5 trillion in the second quarter of this year, setting a new quarterly record.
According to financial data provider FnGuide, operating profit consensus for the second quarter of this year for Hanwha Aerospace, Hyundai Rotem, Korean Aerospace Industries (KAI) and LIG D&A totaled KRW 1.5026 trillion. That is an increase of 11.7% from the same period last year.
Sales are also expected to return to the KRW 10 trillion range. The defense industry’s Big 4 first surpassed KRW 10 trillion in combined sales in the fourth quarter of last year, when sales reached KRW 12.9183 trillion, but slowed to KRW 9.4691 trillion in the first quarter of this year. A revenue consensus for the second half stands at KRW 11.298 trillion.

The performance of Hanwha Aerospace stands out the most. Its second-quarter operating profit is projected at KRW 1.0224, raising expectations that it will surpass KRW 1 trillion in quarterly operating profit. As revenue recognition for export business to Europe, including Poland, expands, business in Egypt and Australia is also expected to contribute to earnings.
Hyundai Rotem is expected to post second-quarter operating profit of KRW 270.2 billion, a 4.9 increase from a year earlier. Despite the burden of the significant performance boost from last year’s exports of K2 tanks to Poland, the company appears to be maintaining stable profitability.
KAI’s second-quarter operating profit is forecast to rise by 22.6% to KRW 104.5 billion. This is attributed to the delivery of T-50i training fighter planes to Indonesia, and a recovery in the civilian aircraft components business.
LIG D&A is expected to record the highest growth rate among the four major defense companies in the second quarter, with operating profit increasing by 36% to KRW 105.5 billion. Demand for the UAE Cheongung-II (medium-range surface-to-air missile) project and air defense systems in the Middle East is also continuing.
Visibility on future earnings is also considered strong. As of the first quarter of this year, the combined order backlog of the four companies exceeded KRW 100 trillion, meaning they have secured a stable production base for several years based solely on the work already obtained.


 
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K-Tire Production Base Shifts from China to Europe

August 26, 2026 by Leave a Comment
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Nexen drastically reduces production in China.
Hankook Tire significantly expands its Hungarian plant.
Kumho expands production in Vietnam and Korea.

The domestic tire industry has accelerated the expansion of overseas local production and the restructuring of its supply chains.
According to sources in the tire industry, Nexen Tire plans to reduce the proportion of Chinese-made tires in its European sales volume from approximately 15% last year to about 4% this year. Shipments from its Chinese factories to Europe have also been cut from about 3 million tires annually to around 600,000. The company’s strategy is to replace those volumes with production from its plants in South Korea and the Zatec plant in the Czech Republic to minimize tariff-related risks.

Among South Korean manufacturers, a tariff rate of 29,9% was imposed on tires produced in China by Nexen Tire and Kumho Tire, respectively, while a lower tariff rate of approximately 3.4% was imposed on products of Hankook Tire & Technology, which has a relatively lower proportion of production in China. It is reported that the EU determines tariff rates by comprehensively considering factors such as the proportion of Chinese-made products and the ratio of local production in Europe.
Nexen Tire is accelerating the adjustment of its production bases to reduce the tariff burden on Chinese-made tires. The company is shifting a substantial portion of exports to Europe previously supplied from its Qingdao factory in China to a parallel production system at its domestic plants in Yangsan and Changnyeong, South Gyeongsang Province, as well as at its plant in the Czech Republic. The strategy aims to preemptively reduce the proportion of Chinese-made products subject to tariffs and replace a significant portion of European sales volume with locally produced goods.
The tire industry as a whole is also accelerating its move to reduce tariff risks. Kumho Tire, which produces approximately 30% of its total global output in China, has embarked on structural improvements and supply chain diversification. It is pursuing plants to expand the proportion of high-value-added products and reorganize a portion of its production volume in China to focus on factories in Vietnam and Korea. Furthermore, it is accelerating the establishment of a local production system in Europe, aiming to complete its new Hampyeong plant in 2027 and its Poland plant in 2028.
Hankook Tire & Technology, which has a relatively low proportion of production in China, plans to maintain its existing strategy while focusing on strengthening production competitiveness in Europe. Following the operation of its Hungarian plant since 2007, the company has recently expanded its production lines to include tires for trucks and buses through a large-scale expansion, securing an annual production capacity of approximately 18 million units.

 
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Competition for LNG Carriers Intensifies

August 26, 2026 by Leave a Comment
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Korean companies secure 64% of this year’s orders.
China increases production emphasizing cost-effectiveness.
Japan expands government support.

The liquefied natural gas (LNG) carrier market is heating up again. Competition for orders is intensifying as the expansion of LNG projects, centered in the U.S., coincides with the demand for replacing existing vessels with eco-friendly ones. Global LNG carrier orders, which stood at just 37 vessels last year, surged to 35 in the first quarter of this year alone and reached 53 as of early June.
According to sources in the shipbuilding industry, Korean shipbuilders have maintained an advantage so far in the global LNG carrier bidding war. As of early June this year, Korean shipbuilders secured 34 orders out of the 53 LNG carriers ordered worldwide, 64% of the total.
By company, HD Korea Shipbuilding & Marine Engineering had the most orders with 16 vessels, followed by Samsung Heavy Industries with 12 and Hanwha Ocean with 6.

The reason Korea has taken the lead is high technological barriers. LNG carriers are a representative high-value-added ship type that must safely transport liquefied natural gas at 163 degrees Celsius below zero.
Industry sources assess that Korea’s three major shipbuilders ‒ HD Korea Shipbuilding & Marine Engineering, Hanwha Ocean, and Samsung Heavy Industries ‒ earn absolute trust from global shipowners based on decades of accumulated construction experience, quality control systems, large-scale project execution capabilities, and on-time delivery compliance.
China has recently been rapidly expanding its presence in the high-value-added LNG carrier sector. By early June of this year, Chinese shipbuilders had secured orders for a total of 19 LNG carriers, trailing closely behind Korea.
China is currently expanding its presence in the global market by leveraging its price competitiveness and large-scale production capacity. As of last year, it has reportedly accounted for over 70% of total global ship orders.
Japan has also launched a counterattack at the national level. A sense of crisis is mounting as Japan’s share of global ship orders has fallen from the past 15~16% level to 8% last year.
Japan plans to restore competitiveness in high-value-added vessel types, such as LNG carriers, through shipyard consolidation, facility investment, AI and DX based productivity enhancement, and manpower development.
 
 
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K-Heavy Industries Also Takes Advantage of Data Center Boom

August 26, 2026 by Leave a Comment
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Entering AI power infrastructure business one after another

Traditional heavy industries are jumping into the data center market amidst the artificial intelligence (AI) data center boom. Korea’s shipbuilding, oil refining, construction machinery, and steel industries are joining the data center market, which has till now been considered a feast only for semiconductor companies. With the spread of generative AI sparking a data center construction boom centered in North America, the entire related industry, including power, cooling, engines, and steel, has started to find new sources of revenue.
According to industry sources, HD Construction Machinery plans to develop engines for data centers by next year to meet the growing demand for emergency generators driven by increasing data centers. The company is targeting the market for ultra-large engines for AI data centers by leveraging industrial engine technology previously used for emergency generators. Accordingly, it is constructing a new engine factory in Gunsan, North Jeolla Province, in addition to its current engine plant in Incheon.

Korea’s large shipbuilding industry is securing substantial orders. As it takes years for U.S. big tech companies to connect data centers to the power grid, power generation facilities based on ship engines have emerged as a realistic alternative. HD Hyundai Heavy Industries announced that it has secured its first order for engines for U.S. data centers, while Hanwha Engine and STX Engine are also considering entering the business to meet growing demand. It is also analyzed that the shipbuilding industry is expanding its scope beyond simple ship manufacturing into the power generation and electrical infrastructure sectors.
The oil refining industry is also riding the AI wave. It is targeting the ‘liquid immersion cooling’ market, which is currently the hottest keyword in the data center industry. Oil refiners are accelerating the competition to develop cooling oil fluids for data centers by leveraging their existing lubricant technologies.
The steel industry also has high expectations of the AI boom. AI data centers are much heavier than ordinary buildings, and their power facilities are constructed with multi-layered structures, requiring a large volume of large section steel (H-beams) and high-grade structural steel. Hyundai Steel has signed a strategic framework agreement with Amazon Web Services (AWS) and is supplying eco-friendly steel materials, such as carbon-reducing steel and H-beams, to major data centers in the Asia-Pacific region.

 
 
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HD Hyundai Heavy Industries

May 15, 2026 by Leave a Comment
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HD Hyundai Heavy Industries Builds World’s First Ammonia-Powered Gas Carrier

HD Hyundai Heavy Industries has successfully built the world’s first ammonia-powered vessel (photo). The company held a naming ceremony at its Ulsan shipyard for two 46,000-cubic-meter mid-sized gas carriers equipped with dual-fuel engines.
The two vessels, Antwerpen and Arlon, were named after cities in Belgium. They are the first and second of four ammonia-powered mid-sized gas carriers ordered by Exmar LPG France, a subsidiary of Exmar, in 2023 and 2024. The vessels will be delivered to the shipowner in May and late July, respectively, following final outfitting. Each vessel measures 190 meters in length, 30.4 meters in width and 18.8 meters in height, and is equipped with three cargo tanks designed and built using the company’s proprietary technology. The ships can safely transport liquefied gases such as ammonia and liquefied petroleum gas.

They are also fitted with a shaft generator that produces electricity using a propulsion system and a nitrogen-oxide reduction system to enhance environmental performance. Safety features include real-time ammonia-leak detection and emission-recovery systems.
Ammonia, a carbon-free fuel, can be stored in pressurized or low-temperature tanks without requiring ultra-low-temperature technology. When liquefied, it offers about 1.7 times higher storage density than liquid hydrogen, making it suitable for large-scale, long-distance hydrogen transport and storage.


 
 
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LS to Build More Plants in Vietnam

May 15, 2026 by Leave a Comment
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Logistics center Phu My Port is mentioned as a new base

Amid the rapid growth of the global ultra-high voltage cable market driven by a surge in power demand fueled by artificial intelligence (AI), LS Cable & System has set out to expand the production-capacity of its Vietnamese subsidiary, LS Eco Energy.
According to the power industry, LS Eco Energy is searching for a site to expand its plant to increase its local production capabilities in Vietnam.

LS Eco Energy is considering new investments because its existing local production subsidiaries have reached a saturation point. LS Eco Energy is currently operating LS-VINA in Hai Phong, a city in the northern region of Vietnam, and LSCV in Ho Chi Minh City, in the southern region. Among these, LS-VINA is the only company in Vietnam capable of producing 200 kV ultra-high voltage cables and holds the top market share in the local market. Last year, a surge in export volumes to the United States and Europe contributed to LS Eco Energy achieving its best-ever performance.

The plan is to secure production capabilities for 400 kV super ultra-high voltage cables, which are used for transmitting large-scale power over long distances.
There are also predictions that the scale could be expanded by merging with investments from other LS Group affiliates, including E1, a liquefied petroleum gas (LPG) import and distribution company. The explanation is that the LS Industrial Complex will be established in Vietnam by aggregating demands from various companies.
 
 
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Korea’s Steel Industry

May 15, 2026 by Leave a Comment
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Specialty Steel Becomes a Breakthrough for Survival of Korea’s Steel Industry

Hyundai Steel creates a dedicated organization
POSCO develops steel materials for transmission networks
SeAH Steel Holdings targets Europe

The domestic steel industry has begun targeting the ‘next-generation energy infrastructure’ market, focusing on specialty steel materials related to power grids, energy storage systems (ESS), offshore wind power, and data centers.
According to industry sources, major steel makers are actively moving to dominate the specialty steel market in the energy infrastructure sector by creating a dedicated organization.

Hyundai Steel is taking the most active steps by operating the Next-Generation Power Infrastructure Task Force (TF) Team. Orders that the company has received for its steel materials for ESS enclosures (steel cases protecting power equipment such as batteries) for North America reached 10,500 tons last year, the first year of supply and 52,000 tons this year, exceeding the target five-fold.
POSCO has targeted the power grid, data center, and solar energy markets. In collaboration with Korea Electric Power Corporation (KEPCO), the company developed steel specifically for long-distance high-voltage direct current transmission (HVDC) towers and secured new demand of 90,000 tons per year.
‘PosMAC,’ the highly corrosion-resistant alloy steel sheet developed by POSCO, is expanding its application beyond solar power structures in extreme environments to ESS parts. The company is also increasing its market share in the artificial intelligence (AI) data center server room field, where space efficiency is essential by introducing ‘Pos-H,’ a customized beam structural material.
SeAH Steel Holdings is achieving significant results in its main business area, the offshore wind power substructure market. The company will supply all 62,000 tons of specialty heavy wall pipes, the largest ever, to the Shinan Ui Island Offshore Wind Power Project with a total project cost of KRW 2.6 trillion.
Dongkuk Steel Group has released D-Megabeam, a specialty steel material that can withstand the ultra-high loads of ultra-large data centers. In addition, the company is actively pursuing a new business of directly constructing and operating a data center.


 
 
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the Korean shipbuilding industry

May 15, 2026 by Leave a Comment
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Korean Shipbuilders Selectively Receive Orders for High-Value-Added Ships

Receiving many orders for large oil tankers including
ammonia and LNG carriers

South Korea’s top shipbuilders are set for a sharp earnings rebound.
According to financial information company FnGuide, the combined operating profit of HD Korea Shipbuilding & Offshore engineering, Hanwha Ocean and Samsung Heavy Industries is projected to reach KRW 1.9221 trillion in the first quarter, up 54.9% year on year. Combined revenue in the same period is forecast to rise 13.6% to KRW 14.0996 trillion.

By company, HD Korea Shipbuilding & Offshore Engineering is expected to post revenue earnings of KRW 7.7866 trillion in the first quarter, up 14.99%, and operating profit of KRW 1.1902 trillion, up 38.53%. Hanwha Ocean’s revenue in the first quarter is projected to reach KRW 3.3020 trillion won, up 5.06%, with operating profits rising 48.22% to KRW 383.3 billion.
Samsung Heavy Industries is forecasted to record the strongest profit growth, with revenue of KRW 3.0110 trillion (up 20.71%) and operating profit of KRW 348.6 billion (up 183,24%).
The three shipbuilders have concentrated on selectively receiving orders for high-margin vessels such as liquefied natural gas (LNG) carriers, liquefied petroleum gas (LPG) and ammonia carriers, and very large crude carriers (VLCC).
HD Korea Shipbuilding & Offshore Engineering secured orders for 54 vessels worth USD 5.94 billion in the first quarter, achieving 25.5% of its annual target (USD 23.31 billion). Its diversified portfolio includes 10 LNG carriers, 20 container ships, five LPG and ammonia carriers, seven crude oil tankers and 12 petrochemical carriers (PC carriers).
Samsung Heavy Industries won orders for 16 vessels, including six LNG carriers, two very large gas carriers (VLGC), four crude carriers, and two containers, worth USD 3.1 billion ― thereby reaching 22.3% of its annual target (USD 13.9 billion).
Hanwha Ocean secured orders for 12 vessels, including four LNG carriers, seven VLCCs and one offshore wind installation vessel, worth USD 2.43 billion.
This momentum has continued into the second quarter. HD Korea Shipbuilding & Offshore Engineering recently added new orders for four LPG carriers and eight PC carriers, worth KRW 1.2008 trillion, bringing cumulative orders to USD 6.74 billion (66 vessels), representing about 29% of its annual target.


 
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Hyundai Motors to Introduce All of its Hydrogen Value Chains in Japan

April 15, 2026 by Leave a Comment
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Driving range of 720km, surpassing Toyota
Scheduled for launch in Japan in the first half of this year

Hyundai Motor Group will solidify its position as a global leader in the hydrogen sector by introducing all of its hydrogen value chains in Japan, the birthplace of hydrogen.
Especially designed for models to be launched in Japan, a vehicle-to-home (V2H) function that can supply power to homes in case of an emergency, considering disaster situations such as earthquakes and power outages. Hyundai Motors will launch The All-New Nexo in the first half of this year. In addition to passenger models, hydrogen-electric trucks and hydrogen-electric tram models will also be shown at this exhibition.

Hyundai Motor Group is also demonstrating its capabilities as an ‘energy solution company’ beyond just being an automobile manufacturer. ‘The hydrogen automatic EV charging robot,’ developed by Robotics Lab will show a charging demonstration of The All-New Nexo. This robot enables 24-hour unmanned charging without human intervention, through vision AI technology.
The company will also display a model of a packaged hydrogen-charging station to expand the hydrogen charging infrastructure. This charging station is designed to modularize core facilities in the form of containers so that they can be freely placed, both horizontally and vertically. In addition, it is considered a practical alternative to solving the problem of securing land for charging stations in urban areas, which is the biggest obstacle to the supply of hydrogen cars, by incorporating multi-layering and undergrounding technology.
Furthermore, Hyundai Motor will also unveil its hydrogen-burner technology for decarbonizing the manufacturing process. Starting with the company’s plant in Ulsan, it will convert to hydrogen about 5,000 liquefied natural gas (LNG) burners in domestic production bases and introduce it to more production bases in North America and Europe.
Hyundai Motor established a hydrogen research and development organization in 1998 and has been conducting research for 30 years.

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Hyundai Mobis Obtains Huge Orders in Europe

April 15, 2026 by Leave a Comment
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Jackpot in Europe following the USA
Recognized for its supply capabilities and technology

Hyundai Mobis will supply chassis modules on a large-scale to Mercedes-Benz in Europe after its success in North America. Hyundai Mobis announced that it has signed a contract with Mercedes to supply chassis modules, and has operated a dedicated production base in Hungary for this purpose. It plans to supply chassis modules for electric and hybrid vehicles through this new plant in Hungary and build facilities for mixed manufacturing with gas and diesel vehicles.

The chassis houses components such as steering, braking, and suspension that runs under the vehicle body. When these devices are installed on the vehicle body, it is called a chassis module, which is considered a key component that determines driving stability. As vehicle parts are integrated and provided in a package format, there are many cases where supply continues for a long time once trust relationships with customers are established.
The industry also sets a high value on the fact that the company has established a forward base in Hungary, targeting the European market, where premium automakers are located. Hyundai Mobis’ new European plant in Kecskemét , central Hungary, is the size of seven football fields (equivalent to 50,000 square meters). Recently, Hungary has been rapidly emerging as an automobile and battery production hub in Eastern Europe. Production bases of major battery cell companies such as Samsung SDI, SK On, and CATL as well as finished car makers such as BMW have been built, resulting in annual production of 500,000 new cars.

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