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Intelligence for Better Decision Making
| Domain | Causal Chain | Possible Outcome |
|---|---|---|
| Macroeconomics & Growth | (Semiconductor export boom ↑ → Terms-of-trade index ↑ → Current-account balance (% GDP) ↑ → Potential GDP growth revision ↑ → Real GDP growth ↑) | The enhanced terms of trade and external surpluses will underpin upward revisions to potential output and drive stronger real GDP growth. |
| Macroeconomics & Growth | (Memory chip price surge ↑ → Import-price pass-through ↑ → Headline CPI/Core CPI ↑ → Inflation volatility ↑ → Inflation-targeting credibility ↓) | Rising import-price pass-through and inflation volatility may erode confidence in the central bank’s ability to keep inflation near its 2 percent target. |
| Competitiveness | (Semiconductor export boom ↑ → Trade-openness & preferential access ↑ → Real export market-share change ↑ → High-value-added export share ↑ → Total-factor productivity level vs frontier ↑) | Greater preferential access and high-value trade gains will accelerate productivity convergence toward the global frontier. |
| Macroeconomics & Growth | (DRAM price surge–driven profits ↑ → Capital-formation rate ↑ → Business fixed-investment growth deviation ↑ → Private fixed-investment growth ↑ → Potential GDP growth revision ↑) | Surging profits will finance elevated business investment, prompting analysts to hike potential GDP growth estimates. |
| Macroeconomics & Growth | (Memory chip price surge ↑ → Global-value-chain reconfiguration velocity ↑ → FDI net inflow (% GDP) ↑ → Foreign-owned green-field project count ↑) | Accelerated value-chain shifts will draw substantial FDI and increase foreign-owned greenfield semiconductor projects. |
| Firms | (South Korean PPI inflation ↑ → Supply-chain restructuring cadence ↑ → Supplier-delivery-times index ↓ → End-to-end supply-chain lead-time deviation ↓ → Capacity-utilisation in manufacturing ↑) | Faster supply-chain restructuring and reduced lead-time variability will boost manufacturing capacity utilization. |
| Technology & Innovation | (Strategic-sector export risk ↑ → Dual-use export-control restrictiveness ↑ → Semiconductor fab utilisation rate ↓ → AI inference cost index shift ↑ → AI adoption GDP uplift ↓) | Tighter export controls will reduce fab utilization, raise AI inference costs, and dampen AI-driven GDP gains. |
Erudite Risk takes an all risks approach to intelligence reporting. We categorize key intelligence into one of 40 different risk intelligence categories.
The goal is to provide intelligence that allows decision makers to avoid being blindsided by what they may have missed, while informing them to make better decisions as well.
Erudite Risk also includes operations categories so you can monitor the environment for better decision making. Everything is tied together--what happens in risk affects operations and what happens in the market impacts risk profiles.
We categorize key intelligence into one of 30 different operations intelligence categories.
Different roles and functions within the organization can monitor different key issue areas. HR may monitor employment, wages, regulations, labor and management relations, etc., while P&L leaders may monitor overall developing trends.
Lee condemns civilian drone incursion into North Korea as ‘akin to starting a war’
Hankyoreh - E | English | News | Jan. 23, 2026 | North Korea
President Lee Jae Myung condemned the recent incident of a civilian manufacturing and sending a drone into North Korea, calling it "akin to starting a war." During a Cabinet meeting at the Blue House, he emphasized that such actions are unacceptable and likened them to firing a gun towards the North. The individual involved had sent drones on three occasions, prompting Lee to criticize the Ministry of National Defense for inadequate surveillance measures and to demand improved facilities and equipment to prevent hostility and mistrust between the two Koreas. He ordered a thorough investigation into the incident, stating concerns that state agencies might be implicated.
Lee’s comments also aimed to maintain ongoing military efforts to ease tensions on the Korean Peninsula, such as the suspension of loudspeaker and radio broadcasts toward North Korea, signaling his intention to hold those responsible accountable without undermining diplomatic measures.
On energy policy, Lee called for rational, ideology-free discussions regarding the construction of new nuclear power plants and small modular reactors. He acknowledged strong public support for nuclear power as essential to addressing electricity needs and urged efforts to minimize political polarization on the issue. These remarks follow previous government officials’ statements emphasizing the inevitability of expanding nuclear power facilities.
Additionally, Lee addressed the importance of media neutrality concerning court decisions, urging adherence to fairness and the public interest, especially in politically sensitive cases where public broadcasts might criticize prosecutors regardless of verdicts.
(News Focus) Lee's assessment on N. Korea's nuclear capabilities raises urgency of resuming diplomacy
Yonhap | English | News | Jan. 23, 2026 | North Korea
South Korean President Lee Jae Myung revealed that North Korea is producing enough nuclear material annually to build 10 to 20 new nuclear weapons, emphasizing the critical need to resume diplomatic talks with Pyongyang to curb its nuclear weapons program. This disclosure, considered rare and based on classified intelligence shared by South Korean and U.S. agencies, highlights North Korea's ongoing expansion of its nuclear arsenal.
North Korea is operating highly enriched uranium production facilities in Yongbyon and Kangson, along with plutonium production at Yongbyon. These facilities can generate dozens of kilograms of nuclear material a year, sufficient for multiple weapons. Estimates from the Korea Institute for Defense Analyses indicate North Korea possessed between 115 and 131 uranium-based weapons and 15 to 19 plutonium-based weapons as of 2025, potentially rising to 216 uranium-based and 27 plutonium-based weapons by 2030, and further increasing through 2040.
President Lee stated that while complete denuclearization is the ideal outcome, the reality suggests North Korea is unlikely to abandon its nuclear program voluntarily. He proposed a practical approach starting with halting North Korea’s nuclear activities, then pursuing gradual reductions, and ultimately aiming for full denuclearization. Lee’s use of the term "disarmament" signals a renewed push to bring North Korea back to negotiations, despite Pyongyang’s firm stance that its nuclear arsenal is non-negotiable and essential for national security.
U.S. expert proposes S. Korea, U.S., others form 'collective economic deterrence' pact against Chinese pressure
Yonhap | English | News | Jan. 23, 2026 | Shifting Geopolitical Alliances
Victor Cha, a U.S. expert and president of the Geopolitics and Foreign Policy Department at CSIS, proposed the creation of a "collective economic deterrence" pact involving South Korea, the United States, Japan, and other countries to counter China's economic pressure. This proposal comes amid concerns of possible Chinese retaliation toward South Korea following its nuclear-powered submarine project, which the U.S. has approved. The pact aims to collectively respond to any economic coercion by China, similar to the collective security principle of NATO’s Article 5, thereby deterring Chinese economic aggression rather than initiating a trade war.
Cha described China as an unreliable partner for South Korea, accusing Beijing of failing to curb North Korea's nuclear activities and ignoring UN sanctions. He emphasized that no single country in the region can effectively counter China alone, but collectively the countries possess enough leverage. The pact would treat coercion against one member as coercion against all, triggering automatic retaliation, which could impose real costs on Beijing and make it reconsider its pressure tactics.
South Korean President Lee Jae Myung has sought balanced relations with both China and the U.S., exemplified by his recent summit with Chinese President Xi Jinping. However, Cha believes this amicable approach is unlikely to withstand the fallout from the submarine deal, as China has historically retaliated against South Korea economically in response to geopolitical disputes. He called for stronger trilateral cooperation between South Korea, the U.S., and Japan, highlighting their substantial trade with China and leverage over key Chinese imports worth over $23 billion.
Cha urged the Trump administration, which holds the G7 presidency in 2027, to lead efforts in forming this economic deterrence pact and to avoid measures like tariffs on allies. He recommended that Trump explicitly oppose China's economic pressure tactics during his upcoming visit to Beijing in April to deter further coercion against allies, particularly South Korea, following the submarine project agreement.
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