IPO Previously Halted Amid Investor Pushback
Failed Appliance Subscription Model Turns Into a Blessing in Disguise
Targeting the ‘Emerging Market Premium’ in Full Force

Reports suggest that LG Electronics may resume the IPO of its Indian subsidiary as early as this September, following a pause in April. While the company initially withdrew its listing plans, sources indicate that the move was driven more by valuation concerns from investors than by U.S.-led trade tensions.

Around the same period, LG also ended a short-lived home appliance subscription service in India, revealing a misjudgment of the local market. However, some analysts view this early failure as a valuable lesson ahead of the IPO, allowing the company to course-correct without the reputational damage that might have followed a public listing misstep.

LG Electronics Reassesses IPO Strategy Amid Valuation Pushback

On the 19th (local time), Bloomberg News reported—citing sources familiar with the matter—that LG Electronics plans to resubmit its IPO application to Indian financial authorities later this summer, reflecting updated financial performance. If approved, the IPO could proceed within the year. The company had originally submitted documents to the Securities and Exchange Board of India (SEBI) in December last year, receiving regulatory approval in March. However, it abruptly shelved the listing in April, citing market conditions and stating it would revisit the timeline.

At the time, LG pointed to global trade uncertainty triggered by U.S. reciprocal tariff policies as the reason. However, many industry watchers believe the real driver was investor backlash. LG was said to have aimed for an aggressively high valuation for its Indian subsidiary, reportedly seeking a price tag of USD 1.5 billion. This sparked unease among key investors, some of whom began backing away, ultimately derailing the IPO. Some critics suggested that LG’s valuation ambitions had blinded it to optimal market timing.

LG Electronics' Indian subsidiary is the market leader in consumer electronics in India and has consistently delivered strong financial performance, buoyed by rising demand from the country’s expanding middle class. Many believed the IPO was poised for success based on its fundamentals. However, the valuation gap between LG and investors remained unresolved, turning the IPO into a perceived risk. The timing also coincided with a broader global market downturn in April, making investors more cautious. LG ultimately chose to recalibrate rather than push forward prematurely.

Subscription Service Misstep Seen as a Fortunate Warning

Amid these developments, news has emerged that LG Electronics quietly discontinued a subscription-based appliance service in India just three months after its pilot launch last November. The service, which allowed customers to pay a monthly fee for using appliances like washing machines and TVs, was targeted at urban millennials in cities such as Delhi, Noida, and Gurugram—those eager to access new technology without the upfront cost of ownership.

However, consumer response fell short of expectations, and the service was officially shut down in January. Local industry observers attributed the failure to a mismatch with Indian consumer preferences, which still lean heavily toward ownership. Concerns over long-term costs of subscription payments and doubts about service reliability also hindered adoption, limiting the model’s appeal.

Nonetheless, the fact that this strategic misstep occurred before the IPO, not after, may have been a blessing in disguise. Had the service been withdrawn post-listing, market confidence and stock value could have taken a hit, with LG facing simultaneous criticism from investors. Since IPOs expose a company’s brand, leadership, and business model to heightened scrutiny, such a public failure soon after listing might have jeopardized any valuation premium the company hoped to secure. Market participants agree that by encountering these headwinds early, LG Electronics avoided a potentially more damaging outcome down the road.

Emerging Markets Offer Growth Amid Economic Slump

Despite the failure of its ambitious subscription service pilot, LG Electronics is gearing up to relaunch the IPO of its Indian subsidiary, driven by a broader shift in global market dynamics. While consumer electronics demand in developed markets like the U.S. and Europe has plateaued or declined under the weight of high interest rates and economic slowdowns, India is rapidly emerging as a strategic growth hub. Accelerated urbanization and the expansion of the middle class have made India one of the most attractive battlegrounds for global appliance makers.

For LG Electronics, the IPO is more than just a capital-raising exercise—it is a strategic move to solidify its long-term presence and brand dominance in this increasingly important market. Establishing a public footprint could strengthen investor confidence and signal LG’s commitment to sustained growth in India.

LG Electronics first entered India in 1997, and 2025 marks its 28th year of local operations. Over nearly three decades, the company has built a robust production infrastructure and cultivated strong consumer trust through consistent branding and customer service. These efforts are now yielding results.

In the first quarter of 2025, LG’s Indian subsidiary posted revenue of approximately USD 920 million and a net profit of USD 92 million. Both are record-breaking quarterly figures, with a full-spectrum product lineup across major appliance categories and local production capabilities, LG is well-positioned to leverage its IPO not only to attract capital, but to enhance local investor engagement and market visibility.

Analysts believe that LG’s operational maturity, brand equity, and financial performance in India provide a strong foundation for a successful public listing. If the IPO proceeds as expected later this year, it could serve as a catalyst for future expansion and strengthen LG’s foothold in one of the most promising markets in the global consumer electronics landscape.

U.S. Applies NATO’s New Standard to Asia
South Korea Spent 2.8% of GDP (USD 48 billion) Last Year—U.S. Now Asking for Nearly Double
Increasing Allies’ Burden to Enforce ‘America First’ Doctrine

As tensions escalate across the Asia-Pacific, the U.S. is once again calling on its allies to shoulder a greater share of the defense burden. This time, the request is explicit and far-reaching: Washington wants countries like South Korea to boost their defense budgets to 5% of GDP—a figure that significantly surpasses previous expectations and, if adopted, would reshape not only military financing but national budgeting priorities. With former President Donald Trump back at the forefront of U.S. security rhetoric, this demand reflects his administration’s revived “America First” strategy and a pivot in burden-sharing diplomacy that leaves South Korea facing high-stakes decisions.

A Global Benchmark Finds a New Front in Asia

On June 19, the U.S. Department of Defense unveiled a revised global defense spending benchmark that is now being directed at key Asian allies. In a statement delivered by Pentagon spokesperson Sean Parnell, the department echoed comments made by Secretary of Defense Pete Hegseth at a Senate hearing and the Shangri-La Dialogue in Singapore, declaring that NATO’s evolving commitment to spend 5% of GDP on defense should now apply to South Korea, Japan, and others.

Parnell emphasized that “our European allies are setting a global standard for our alliances—particularly those in Asia,” referring to the new 5% target as a unified benchmark. He cited regional threats—China’s aggressive military buildup and North Korea’s persistent nuclear and missile provocations—as compelling reasons why Asia-Pacific allies must accelerate defense spending.

This shift in U.S. policy is not occurring in isolation. NATO, responding to the fallout from Russia’s invasion of Ukraine in 2022, has tentatively agreed to raise its own defense spending to the 5% threshold. NATO Secretary-General Mark Rutte recently confirmed that a full consensus is likely at the July summit. Under this proposed framework, at least 3.5% would go directly toward military readiness and equipment, with the remaining 1.5% covering security-related infrastructure and investments. Rutte made it clear: this new goal is meant to align with the current U.S. defense budget, which stands at 3.38% of GDP, and to ensure NATO allies can independently field the capabilities they need.

Hegseth, speaking at the Senate Armed Services Committee’s hearing on the FY2026 defense budget, was blunt in his assessment. He called it “nonsensical” to demand that European nations meet the 5% GDP target while allowing Asian allies—who face equally grave threats—to spend far less. His remarks clearly signal a coordinated campaign by the Trump administration to embed this new benchmark across both transatlantic and Indo-Pacific alliances.

South Korea’s Strategic Dilemma and Budgetary Reality

Despite its strategic alignment with the U.S., South Korea finds itself in a vastly different position from NATO members. For the 2025 fiscal year, Seoul has earmarked approximately USD 44.6 billion for defense, representing 2.32% of its GDP. To meet the 5% benchmark, South Korea would have to nearly double its defense budget to over USD 72 billion, a leap that experts consider fiscally and politically impractical in the short term.

Defense Secretary Hegseth has suggested that the 5% figure should encompass not only direct military spending but also “defense-related investments.” Even with this expanded definition, experts in Seoul caution that achieving such a target would necessitate significant cuts in other areas of public expenditure, potentially triggering intense domestic political pushback. As a mid-sized economy still heavily invested in welfare, education, and industrial innovation, South Korea cannot easily reallocate funds at this scale without major structural changes.

Moreover, the issue is not only fiscal—it is diplomatic. Many foreign policy analysts warn that, having publicly introduced this benchmark, the Trump administration will likely pressure South Korea to present not only a larger defense budget but also a clear implementation timeline. The possibility of a formalized request emerging during future bilateral or multilateral talks is growing.

This challenge is compounded by anticipated demands that Seoul increase its contribution to the stationing costs for U.S. Forces Korea (USFK), which currently amount to roughly USD 1 billion. Under Trump’s leadership, U.S. policymakers are expected to take a more assertive stance, tying broader alliance costs—including U.S. military presence, regional deterrence operations, and joint drills—to South Korea’s overall defense expenditure. This potentially places Seoul at the center of a broader redefinition of alliance burden-sharing, extending far beyond the immediate defense budget debate.

“America First” and the Recalibration of Alliance Roles

At the heart of this renewed pressure lies Donald Trump’s enduring “America First” doctrine, a worldview deeply skeptical of deploying American resources and personnel to defend foreign nations, even traditional allies. From the beginning of his presidency, Trump has repeatedly accused NATO and Asian partners of “free-riding” on U.S. security guarantees while contributing inadequately to collective defense.

The Trump administration’s interim National Defense Strategic Guidance, issued in March, underscores this ideological shift. The document prioritizes preparations for a Chinese invasion of Taiwan and the defense of the U.S. homeland. In contrast, it assigns responsibility for dealing with other regional threats, including those from North Korea, to America’s allies. In effect, the U.S. is repositioning itself not as a global police force but as a security broker—ready to engage, but only if its allies match its commitments in both rhetoric and resources.

This context is critical to understanding the 5% GDP demand. It is not merely a call for greater defense budgets; it represents a strategic recalibration of how the U.S. defines its alliances. Allies are no longer just partners; they are expected to be co-investors in a shared security enterprise.

One South Korean security expert framed the issue with nuance: “At this stage, the 5% GDP target is America’s hope, not a binding ultimatum. It’s more of a political signal than a concrete requirement. Still, it must be taken seriously.”

For South Korea, the road ahead will require careful diplomacy, balancing the imperatives of maintaining a robust alliance with the U.S. while also preserving fiscal responsibility and public consensus at home. The Trump administration’s proposal may not yet be an ironclad obligation, but it is unmistakably a harbinger of the new expectations shaping U.S. alliance strategy in the Indo-Pacific.

Massive Layoffs Sweep from Manufacturing Firms to Big Tech
WSJ: “AI Adoption Driving Workforce Reductions Despite Strong Earnings”
Amazon, Intel Continue Experiments in 'AI Office Automation'

Despite achieving unprecedented profits in recent years, major U.S. corporations, spanning both traditional manufacturing and modern tech, are now embarking on a wave of workforce reductions. But this isn’t a familiar tale of recession-era cost-cutting. These layoffs are occurring during a period of economic strength and are targeting roles that were once considered secure, including middle managers, engineers, and white-collar specialists. The rapid integration of artificial intelligence (AI) into core operations has redefined the nature of work, triggering one of the most significant restructurings in the modern history of corporate America.

At the center of this transformation is a startling paradox: companies like Procter & Gamble (P&G), Estée Lauder, Intel, Amazon, Microsoft, and others are more profitable than ever, and yet, they are laying off thousands. This shift marks a pivotal moment in how businesses perceive human capital, management structure, and the future of labor in the age of intelligent machines.

Record Profits, Shrinking Teams

In June, The Wall Street Journal reported that P&G plans to cut 7,000 jobs—about 15% of its non-manufacturing workforce. The company described this as an initiative to create “broader roles and smaller teams.” Estée Lauder, the world’s largest cosmetics firm, and Match Group, the tech company behind Tinder, each laid off 20% of their management staff. Meanwhile, Hewlett Packard Enterprise (HPE) let go of 3,000 employees in March, dropping its headcount to just 59,000, the lowest level in a decade.

This isn’t a recession-driven downsizing. Unlike previous layoff cycles that coincided with economic downturns, the current wave is unfolding during a period of historic corporate gains. According to the Federal Reserve Bank of St. Louis, U.S. corporate operating profits hit USD 4 trillion in 2024. Business earnings accounted for 16.2% of the national income, a significant increase from the 13.9% average recorded between 2010 and 2019.

That profitability, however, is now being used as a springboard for restructuring, not expansion. Rather than reinvesting in human resources, companies are reallocating capital and effort toward streamlining operations, often by replacing human workers with AI systems. This recalibration has struck hard at administrative staff, back-office operations, and increasingly, core engineering teams.

Automation and AI Redefining the Workplace

The driving force behind this transition is the maturing capability of AI to perform tasks once thought to require human judgment, experience, or creativity. According to WSJ, AI is now advanced enough to replace not only clerical labor but also complex decision-making roles. Repetitive and standardized office work has become prime territory for automation.

Amazon exemplifies this trend. CEO Andy Jassy, in an internal memo, acknowledged that while some existing jobs would become obsolete due to AI, new roles would emerge requiring different skill sets. He admitted that AI-driven efficiency "may ultimately reduce the total number of office staff.”

The company is not merely theorizing this vision. At the end of 2024, Amazon launched a pilot initiative in some departments to reduce internal meetings. Instead of holding routine check-ins, AI systems compiled real-time summaries of operational updates, formatted them into detailed reports, and sent them individually via email. Based on this successful test, Amazon intends to integrate these AI capabilities directly into its cloud platform, AWS. The goal: to automate routine tasks and shift personnel toward strategic, innovative functions that AI cannot yet perform.

Intel has gone even further in its restructuring. The semiconductor giant laid off 22,000 employees last year. A significant share of those dismissed were team leads and department heads, classic middle managers. CEO Pat Gelsinger was explicit: Intel aimed to eliminate bureaucratic inertia by removing unnecessary decision layers. In the company's accounting department, AI was used to automate report drafting, reviewing, and summarization. This led to the dismissal of three team leads. Subsequently, the entire middle management team of Intel's marketing department was eliminated, with AI-powered reporting tools assuming their duties.

These are not isolated cases. They illustrate a broader corporate playbook in the AI era: simplify, automate, and flatten the hierarchy.

Engineers in the Crosshairs

Perhaps most unsettling is the fact that even highly trained engineering professionals are not immune to this phenomenon. Once viewed as indispensable in the digital economy, software engineers are now among the most vulnerable. Their work, especially coding, is increasingly being automated by AI tools that are faster, more scalable, and constantly improving.

In May 2025, Microsoft announced the layoff of approximately 6,800 employees, representing around 3% of its workforce. It was the largest job cut since January 2023, when 10,000 workers were let go. What stood out in the latest announcement was who got cut: software engineering roles made up 40% of the layoffs. Another 30% came from mid-level management positions, such as product managers and technical program managers.

The rationale? Microsoft stated that its aggressive integration of AI into all facets of the business had made many positions redundant.

This shift reflects a cooling job market for developers across the nation. According to job site Indeed, while total job postings in the U.S. rose 10% year-over-year as of February 2025, listings for software developers plunged by 35%. The U.S. Bureau of Labor Statistics (BLS) predicts a 27.5% drop in employment for computer developers from 2023 to 2025, the sharpest decline since 1980.

What’s replacing them? AI systems that can handle basic to intermediate coding tasks, freeing up the need for manual development. As a result, the demand is shifting from coders to those who can manage AI systems, optimize workflows, and lead machine learning initiatives.

Meta CEO Mark Zuckerberg reinforced this outlook, predicting that by next year, roughly half of development tasks will be handled by AI. That share is expected to continue growing. He emphasized the importance of investing in talent that can enhance AI, specifically in machine learning engineers.

The BLS echoes this sentiment in its long-term forecast: while coding-specific jobs are projected to decline by 10% by 2033, roles overseeing full-spectrum programming systems and integrations are expected to increase by 17%.

In this unfolding reality, it’s no longer just low-skilled or routine jobs at risk. White-collar professionals, once the safe zone of the labor market, are now squarely in the crosshairs. The rise of AI is not only reshaping workflows but also fundamentally redefining the value of human labor in a digitized and automated economy. For both workers and employers, the rules of engagement are changing—and fast.

A Flexible Approach Toward Latecomers
The Race for In-House AI Chip Development Heats Up
HBM4 Winner Expected to Reshape the Memory Market Landscape

In the rapidly evolving landscape of artificial intelligence (AI) hardware, memory technologies like High Bandwidth Memory (HBM) are becoming a decisive battleground. And at the heart of this competition, Samsung Electronics is repositioning itself as a formidable contender. After losing ground in the HBM market to SK Hynix and Micron, Samsung is now reentering the scene through strategic alliances with Broadcom and AMD—an indirect yet potentially potent counteroffensive as it tries to break back into NVIDIA’s supply chain.

While NVIDIA remains dominant and publicly dismissive of these moves, the combination of growing AI workloads, geopolitical pressures, and technological innovation is challenging the status quo. Samsung’s quiet but methodical comeback—marked by advances in HBM3E production and preparations for next-generation HBM4—is sparking speculation across the semiconductor industry: Could this be the move that tilts the AI memory market's balance of power?

Laying the Groundwork for Market Comeback

Samsung’s resurgence began taking tangible form in June 2025, when the company finalized preparations to mass-produce its HBM3E 8-layer memory for Broadcom. This milestone comes just three months after passing Broadcom’s qualification tests in March—an unusually swift progression in a sector where validation and certification often stretch over several quarters. This win was followed closely by another major announcement: Samsung had also secured a supply of its 12-layer HBM3E to AMD, a rising player in AI accelerators.

These products aren’t just incremental improvements—they’re technological statements. The 12-layer HBM3E module developed by Samsung stacks twelve 24 GB DRAM chips using Through-Silicon Via (TSV) technology, enabling a massive 36 GB memory capacity. It boasts a peak bandwidth of up to 1,280GB per second and delivers up to 10 Gbps through 1,024 I/O channels. This level of performance is critical for accelerating the vast computations required by AI models, especially large language models (LLMs) and generative AI tools that now dominate enterprise and cloud computing strategies.

With these advances, Samsung is clearly moving to diversify away from its historical reliance on NVIDIA, which remains the largest consumer of HBM. Instead, it’s forging new inroads with second-tier but fast-rising players like Broadcom and AMD. Market analysts widely interpret these moves as a well-calculated shift, not just a fallback, but a strategic reorientation toward a more balanced and resilient customer base.

According to TrendForce data, SK Hynix controlled 60% of the HBM3E market as of last year, followed by Micron at 25%, while Samsung lagged behind at 15%. But this could soon change. As one industry insider noted, although Samsung had to overcome early challenges such as heat dissipation and power efficiency in HBM prototypes, the company is steadily amassing certifications. “Once it clears the final validation rounds in Q3,” the source said, “Samsung could reenter key customer supply chains before the year ends.”

From a broader perspective, Samsung’s current play is being viewed as a subtle but effective “flanking attack”—not a frontal assault on SK Hynix or NVIDIA’s core markets, but a disruptive maneuver that could unsettle the current equilibrium in AI memory supply.

NVIDIA’s Confidence Amid Ecosystem Superiority

Despite these developments, NVIDIA maintains a posture of calm confidence. The GPU titan has long dominated the AI accelerator space and is backed by a robust ecosystem of software, partnerships, and silicon leadership. CEO Jensen Huang, in a recent session at the VivaTech conference in Paris, downplayed efforts by competitors to develop their own chips, stating bluntly, “Most companies will eventually abandon their in-house chip projects. If it were easy, why would I be working this hard?”

But beneath NVIDIA’s composed exterior lies a flicker of unease. Industry watchers note that while AMD and Broadcom may not pose immediate existential threats, the broader trends toward diversified AI compute demand and expanded HBM supplier pools are undeniable. If Samsung’s forthcoming HBM4—already in an advanced development stage—hits its targets, NVIDIA’s tight-knit supply ecosystem could face pressure.

There’s another layer to Huang’s guarded tone: China. Huang has grown increasingly vocal about Chinese advances in semiconductor design and manufacturing. At VivaTech, he cited Huawei—despite its placement on the U.S. Department of Commerce’s Entity List, as an example of how U.S. export controls may be backfiring by accelerating China’s technological self-reliance. “Chinese competitors have evolved,” he warned, adding that Huawei has become “remarkably strong.”

These remarks suggest that NVIDIA’s strategic calculus isn’t limited to market players like AMD or Samsung; it includes geopolitical variables such as Washington’s export policies and Beijing’s push for tech sovereignty. In this context, Samsung’s rise isn't just a corporate story; it’s part of a larger realignment of global semiconductor supply chains.

Samsung Ramps Up for HBM4 and a New Power Balance

Samsung’s ambitions don’t stop at HBM3E. The company is already making bold progress toward HBM4, the next frontier in high-speed memory. The foundation of this effort lies in its sixth-generation DRAM, which reportedly saw its production yield jump to around 40%—a remarkable leap from near-zero just months earlier. This development positions Samsung for potential mass production of HBM4 by the end of the year, a timeline that could significantly accelerate its reentry into top-tier AI supply networks.

HBM4 isn’t just an incremental step—it represents a paradigm shift. Compared to HBM3E, HBM4 is expected to nearly double bandwidth, dramatically improve data transfer per watt, and enhance overall computational efficiency. In the context of LLMs and hyperscale AI computing, these enhancements translate into faster inference times, greater server density, and better energy performance—all essential for keeping pace with AI’s breakneck expansion.

If Samsung succeeds in signing HBM4 supply deals with Broadcom or AMD, the SK Hynix-centered supply chain could face meaningful disruption. While SK Hynix maintains an edge, having already provided HBM4 samples to NVIDIA, it now faces real competition from a reinvigorated Samsung. Notably, Jeon Young-Hyun, Vice Chairman and Head of Samsung’s DS Division, has openly positioned HBM4 as the company’s “decisive counterattack card”—a signal that Samsung is aiming not just for technical parity, but strategic superiority.

In the final analysis, HBM4 is more than just a memory product; it’s a strategic fulcrum that could determine the trajectory of the entire AI hardware ecosystem. With AI demand surging and memory requirements scaling in tandem, the stakes have never been higher. The prevailing industry view is clear: whichever company first secures reliable mass production of HBM4 and lands key customers will reshape the future of AI computing.

Samsung now finds itself at that threshold. Whether it seizes this moment and regains leadership will not only determine its own future, but may also tilt the balance in the ever-intensifying race to power the AI age.

Tariff Issues and Supply Cuts Lead to DDR4 Shortage
Helps Companies Reduce Dependence on NAND and HBM
Premature Tech Transition Brings Unexpected Risks

A curious phenomenon is drawing attention in the global semiconductor market, where Double Data Rate 4 (DDR4) memory is being traded at higher prices than its newer counterpart, DDR5. As memory manufacturers accelerated the transition to DDR5 and rapidly scaled back DDR4 production, remaining demand for the older model collided with a supply shortage, leading to a short-term price inversion. This has prompted criticism that the industry rushed to phase out DDR4 too quickly, with some calling for a more realistic approach that acknowledges the continued, albeit limited, demand for legacy products.

Temporary “Supply-Demand Distortion” Amid DDR5 Transition

According to market research firm TrendForce on the 20th, contract prices for server-use DDR4 memory are expected to rise 18–23% quarter-over-quarter by the end of this month, while PC-use DDR4 is projected to increase by 13–18%. In the third quarter, an additional increase of up to 13% for servers and 23% for PCs is forecast. Earlier this month, the spot price of DDR4 (16Gb·2Gx8) reached $6.14, exceeding DDR5’s $5.782. Given that DDR5 has been positioned as the mainstream memory format since its rollout in 2020, this price reversal is considered highly unusual.

The industry attributes this phenomenon more to overly reduced supply than to surging demand. Global memory manufacturers hastened the shift to DDR5 and rapidly cut DDR4 production. On top of that, tariff concerns and inventory stocking behavior contributed to an abnormal price rebound. While this distortion may appear like a "revival of an outdated product," it’s better understood as an optical illusion caused by overly aggressive restructuring.

External factors have also fueled anxiety among market participants. Low-end DDR4, long dominated by Chinese suppliers, is now facing uncertainty amid the U.S.’s tightening semiconductor export restrictions on China. This geopolitical tension has added fuel to the price rebound. As a result, a classic case of undersupply relative to demand has emerged, with some distribution channels even experiencing shortages, further amplifying the price distortion.

However, most experts agree that this trend is unlikely to persist long term. As evidence, they cite a similar episode during the previous transition to DDR4. Park Sang-wook, a researcher at Shinyoung Securities, noted, “In 2016, DDR3 prices temporarily exceeded DDR4,” and added, “That price reversal lasted about two months.” He continued, “While factors like tariffs have widened the DDR4-DDR5 price gap this time, past precedent suggests this is likely to remain a temporary phenomenon.”

DDR4 Price Reversal Sparks Optimism for Samsung and SK Hynix Earnings

The sharp rise in DDR4 prices is expected to serve as a surprise boon for South Korean memory giants Samsung Electronics and SK Hynix, whose earnings have recently entered a recovery phase. These two companies, which together control about 70% of the global DRAM market, have restructured their production portfolios around high-value-added products, yet continued to maintain a certain level of DDR4 output. This means they have not only remained suppliers but have now regained their position as price setters in the market. DDR4, long categorized as a legacy memory product and largely ignored by the market, has unexpectedly become a profit-boosting wildcard due to supply shortages.

Optimism about second-quarter earnings for Samsung and SK Hynix is rooted in this situation. Although technology-intensive products like High Bandwidth Memory (HBM) and DDR5 remain central to profitability, the price spike in DDR4 is now viewed as a complementary factor that can stabilize their profit portfolios. In particular, since DDR4 has still accounted for a sizable portion of Samsung’s total DRAM revenue until recently, the price rebound is expected to make a tangible contribution to earnings.

In fact, while Samsung began phasing out production of 8Gb LP DDR4 using its 1z-nm process last year, it still maintains output of DDR4 for servers and some PCs. As for SK Hynix, DDR4 accounted for around 40% of its DRAM production in 2024, and the company had announced plans to reduce that to around 20% within the year.

Premature ‘End-of-Life’ Declaration Triggers Volatile Transition Period

This recent shift marks a sharp contrast to earlier this year, when DDR4 was widely seen as on its way out of the market. At the time, DDR4 was considered a product that had already reached its structural limits in terms of bandwidth expansion and power efficiency. From a profitability standpoint, its status as an older generation memory placed it low on the priority list for further investment. Accordingly, most companies began to phase out DDR4 production lines or reallocate them to HBM and DDR5 manufacturing as part of future-focused strategic shifts.

However, the recent price rebound has prompted some to reconsider whether the industry’s judgment on DDR4 was premature. In reality, consistent demand remains in sectors like industrial equipment, entry-level PCs, and certain server markets. While the transition to DDR5 is ongoing, not all consumers are adopting the new technology at the same pace. In areas where component compatibility and budget constraints are key concerns, DDR4—known for its proven stability—continues to be preferred. The premature declaration of its obsolescence, coupled with suppliers' compliance, is now being criticized for creating a supply-demand imbalance.

This situation serves as a reminder that technological transitions don’t happen overnight. As one industry insider put it, "DDR4 is undoubtedly a legacy product, but at this moment, it remains a practically viable asset with real demand and profitability potential. The hasty ‘end-of-life’ announcement may have triggered an unstable transition period instead.”

In essence, discontinuing a product line solely based on market expectations, without factoring in existing demand, risks disrupting both suppliers and consumers alike.

Tax incentives to shift from investment-based to production-based metrics
Establishing a mega-cluster in southern Gyeonggi Province as a key priority
Special legislation required to provide legal grounds for tax credits and other support

The Lee Jae-myung administration, which identified strengthening the semiconductor industry as its top policy pledge, is now accelerating related support initiatives. The government is pushing to shift the basis for tax incentives from investment volume to production output, while also fast-tracking plans to establish the world’s largest semiconductor mega-cluster in southern Gyeonggi Province. These moves are being seen as strategic efforts to bolster the global competitiveness of domestic firms amid ongoing supply chain realignments. Industry insiders are closely watching for the potential revival of legislative efforts and the broader ripple effects across the sector.

Production-Based Tax Credits Inspired by U.S. IRA

According to the semiconductor industry on the 18th, if President Lee Jae-myung’s campaign pledge for tax credits on semiconductor production is realized, it is expected to significantly strengthen the global competitiveness of South Korean companies. Traditionally, tax incentives for national strategic technologies have been based on investment amounts. However, this proposal marks a shift toward production-based tax credits, mirroring the structure of the U.S. Inflation Reduction Act (IRA). Industry analysts estimate that such a policy could result in tax savings of approximately USD 6.5 billion for companies like Samsung Electronics and SK Hynix.

As part of his presidential campaign, President Lee pledged to: establish a comprehensive semiconductor ecosystem hub; maintain a technology edge in AI semiconductors like High Bandwidth Memory (HBM) and bolster support for promising fabless startups.

The initiative includes a government-led, full-spectrum support framework for all aspects of the semiconductor industry, from fabless design and foundry services to advanced packaging. Key goals include enhancing capabilities in next-generation technologies such as sub-2nm process nodes and establishing a “K-Fabless Valley” in Pangyo.

The government also plans to grow the materials, components, and equipment (MCE) sector. In advanced processes, MCE is a decisive factor influencing quality, yield, and production schedules. Therefore, achieving technological self-reliance in MCE is viewed as a prerequisite for global competitiveness. The government aims to: build mini-fabs for pilot production, link MCE companies with production pipelines, and expand the system semiconductor ecosystem through targeted R&D support. This will be bolstered by creating R&D infrastructure, enhancing regional testbeds, and developing industry-aligned workforce training programs to help domestic MCE companies grow into global players.

President Lee Jae-myung Emphasizes the Enactment of the Special Semiconductor Act

President Lee Jae-myung has underscored the urgent need to enact the Special Semiconductor Act, a core campaign pledge designed to underpin key government support measures such as production-based tax credits and the rapid development of a semiconductor mega-cluster. In April, the Democratic Party fast-tracked a revised version of the bill that includes provisions to: establish a National Semiconductor Committee, mandate government support for critical infrastructure such as electricity, water, and transportation, provide subsidies for renewable energy installations to reduce greenhouse gas emissions, and create a Semiconductor Industry Support Fund and promote regional cooperation projects

However, the bill stalled due to a political deadlock over one major issue: whether to grant an exemption from the 52-hour maximum workweek rule for R&D personnel. While opposition parties like the Democratic Party argued for passing the already-agreed components—such as tax incentives and infrastructure support—the ruling People Power Party insisted the exemption was essential. The government also took a firm stance, saying the law would lose its effectiveness without this clause. Meanwhile, labor unions strongly opposed expanding exemptions to the work hour cap.

Despite the legislative impasse, industry insiders remain optimistic about a renewed push to pass the bill. President Lee has consistently shown strong commitment to the legislation since his candidacy, declaring that “protecting semiconductors is protecting our future” and vowing to pass the bill pending in the National Assembly swiftly.

After winning his party’s nomination, President Lee made a symbolic first economic visit to SK Hynix’s Icheon campus, where he met directly with industry leaders and reaffirmed his intention to secure Korea’s global semiconductor competitiveness through bold support policies and regulatory reforms.

Real Estate Heats Up Amid Semiconductor Cluster Development

One of the key national initiatives under the Lee Jae-myung administration’s semiconductor support policy is the timely creation of a semiconductor mega-cluster. The plan envisions building a fully integrated ecosystem covering the entire value chain—from R&D to design, testing, and mass production—centered in the southern Gyeonggi region, including Seongnam, Suwon, Yongin, Hwaseong, Pyeongtaek, and Anseong. While the previous administration had also promoted this as a strategic national project through tax incentives and streamlined permitting processes, the current government is expected to accelerate the plan significantly.

According to the government’s roadmap, private sector giants such as Samsung Electronics and SK Hynix are expected to invest a total of USD 450 billion by 2047. The investments will focus on building the world’s largest and most advanced semiconductor cluster in areas such as Namsa and Wonsam in Yongin and Godeok in Pyeongtaek. In support of this initiative, the Gyeonggi Provincial Government has requested the central administration’s assistance in rapidly expanding essential infrastructure—such as roads, water supply, and electricity—for the Yongin and Pyeongtaek national strategic industrial complexes. It also requested streamlined permitting for the planned materials, components, and equipment (MCE) cluster on agricultural land in Anseong.

As anticipation for the mega-cluster project intensifies, the real estate market in southern Gyeonggi Province is showing notable signs of activity. In cluster-designated or adjacent cities like Yongin, Pyeongtaek, and Icheon, expectations of population inflow and new company entries tied to large-scale industrial developments are fueling increased apartment transactions. Newly launched apartment complexes are rapidly selling out. For example, Yongin’s apartment transaction volume surged 28.3% year-over-year, the highest increase in Gyeonggi Province, and this momentum has continued into the current year, with rising transaction prices.

Large-scale knowledge industry centers and commercial properties are also enjoying high contract rates and strong investment interest. One such example is the Shin Gwanggyo Cloud City complex in Yeongdeok-dong, Giheung-gu, Yongin. This development, scheduled to be the largest knowledge industry center in southern Seoul's metropolitan area, will span six basement levels and 33 above-ground floors across five buildings, with a total floor area of approximately 350,000㎡. Sales have been robust, with rising contract rates projected into the first half of 2025.

Industry experts forecast that as the mega-cluster development progresses, demand for housing, commercial, and office space will rise in tandem, creating a trickle-down effect across the local economy of southern Gyeonggi Province. The real estate boom is thus expected to continue as the semiconductor cluster becomes a tangible growth engine for the region.

China’s Refining Industry on Edge Amid Iran–Israel Clash
Infrastructure Investment and Military Cooperation Efforts at Risk of Collapse
“Global Oil Prices Stay Calm” — Western Countries’ Expected Damage Falls Short

There is growing speculation that the military clash between Israel and Iran could inflict significant damage on China. Analysts warn that if Israel targets Iran’s oil infrastructure in future attacks, Chinese refineries, a key destination for Iranian crude exports, would take a direct hit.

Private Chinese Refiners Face Serious Threats

On June 17 (local time), The Wall Street Journal (WSJ) reported that a potential Israeli strike on Iran’s critical energy export hubs could cut off China's access to cheap Iranian crude. According to energy research firm Kpler, more than 90% of Iran’s crude exports currently go to China, with the majority processed by small independent refiners in Shandong Province.

Operating separately from China’s state-owned oil companies, these private refiners have been major purchasers of Iranian crude—despite it being sanctioned by the U.S. and other Western powers—since 2022. They rely on the discounted oil to maintain profitability. Tom Reed, Vice President for China crude at Argus Media, explained that Iranian crude is roughly USD 2 per barrel cheaper than comparable blends from non-sanctioned producers like Oman.

The concern is that if Israel escalates its military campaign, this entire supply chain could be jeopardized. If Israel aims to destabilize Iran’s regime, Kharg Island—home to much of the country's key oil export infrastructure—would likely be among the first targets. Should that happen, most Iranian oil exports would come to a halt, leaving Chinese refiners exposed to serious supply shocks.

China Reels from the Fallout of War

The damage China faces from the escalating Israel-Iran conflict goes far beyond mere supply chain disruptions. China has signed a 25-year comprehensive cooperation agreement with Iran and has undertaken massive investments in the country’s energy and infrastructure sectors, playing a key role in supporting Iran’s economic development. In particular, Chinese capital has been heavily funneled into Iran’s oil and gas development projects. Should the ongoing military clash result in widespread destruction of Iran’s energy infrastructure, a significant portion of China’s investments in the country could be rendered worthless.

If Iran suffers serious setbacks in the war, the military cooperation between the two nations is also likely to weaken. Should Western countries impose sweeping sanctions on Chinese companies collaborating with Iran, it could effectively bring China’s military investments and arms trade with Iran to a halt. Furthermore, if China continues to offer active support to Iran, it may face intensified economic sanctions and military pressure from the West. This could ultimately unravel the anti-U.S. alliance between China and Iran, shrinking China’s overall diplomatic and strategic standing on the global stage.

Global Oil Prices Decline Despite Conflict

Contrary to initial fears, the impact on major economies—particularly the United States—appears smaller than expected as global oil prices have remained stable despite the escalation of hostilities between Israel and Iran. On June 16, West Texas Intermediate (WTI) crude fell 1.66% to close at USD 71.77 per barrel, while Brent crude dropped 1.35% to USD 73.23. This comes after oil prices initially spiked by over 10% on June 13, when the conflict intensified, only to later give up half of those gains. When markets reopened after the weekend, prices closed even lower than before Israel’s strikes on Iran’s oil and gas infrastructure.

A key reason behind the suppressed rise in oil prices is the ongoing Western sanctions on Iran. These sanctions have significantly restricted Iran’s oil exports and diminished its influence in the global market. Whereas Iran once exported over 6 million barrels per day in the 1970s, that figure fell to 2.5 million barrels in the 2000s, and plummeted to just 400,000 barrels during the COVID-19 pandemic in 2020. Although exports recovered somewhat—primarily to allies like China—after the Russia-Ukraine war, they remain limited at around 1.5 million barrels per day.

Additionally, oil-producing nations under the OPEC+ alliance have ample spare production capacity. Since the second half of 2022, OPEC+ has maintained production cuts, but began increasing output in April 2025 to reclaim market share. According to Lee Dal-seok, a former executive at the Korea Energy Economics Institute, “In times of geopolitical crises, spare production capacity becomes the key driver of oil prices. With Middle Eastern producers holding 4 to 5 million barrels per day of additional capacity, and U.S. shale oil supplies still strong, prices have remained stable.”

Market sentiment also reflects the belief that the Strait of Hormuz will remain open. One market insider noted, “A full blockade of the Strait of Hormuz would be a highly risky move for Iran. It would alienate key allies like China and give the U.S. a pretext for military intervention.” Situated between Iran, Oman, and the United Arab Emirates (UAE), the Strait of Hormuz connects the Persian Gulf with the Gulf of Oman and is one of the world’s most critical chokepoints, handling around 20% of global oil and LNG seaborne trade.