South Korea’s Growing Economic Divide
- Hajin Kim
- Jun 6
- 1 min read
June 6, 2026
Hajin Kim
South Korea's economy is becoming more divided. The semiconductor industry continues to grow because of strong production and exports, but many other industries are still struggling due to high oil prices and weak domestic spending.
The conflict in the Middle East has increased production costs and created concerns about inflation. At the same time, South Korea is becoming more dependent on the semiconductor industry. This has raised concerns that the economy could become unstable if global investment in artificial intelligence (AI) slows down in the future.
Because of these concerns, some experts argue that South Korea should invest more in developing a competitive AI industry to achieve stable economic growth and strengthen its future potential.
Most industries outside of semiconductors remain in a difficult situation. According to a report from the National Assembly Budget Office, non-semiconductor manufacturing industries are recovering slowly because of a weak currency, high interest rates, and low demand.
Traditional industries such as petrochemicals and steel are facing increasing competition from China and weaker global demand. As a result, factory utilization rates have fallen, and some companies are even considering restructuring.
The construction industry has also experienced a long period of weakness due to the slowdown in local real estate markets and rising construction costs.
The main concern is that South Korea's current economic growth depends heavily on the semiconductor industry. If global demand for AI-related investment decreases, economic growth could slow down. In addition, there is a gap between positive economic indicators and the economic conditions that ordinary people actually experience in their daily lives.
