South Korea

Intelligence for Better Decision Making

South Korean Corporations Advance AI Integration and R&D to Drive Industrial Transformation in 2026

Jan. 6, 2026 | Technology & Innovation

South Korean corporations are integrating artificial intelligence and bolstering research and development to reshape industrial processes and accelerate growth.

**Hyundai Motor Group’s Executive Chair Euisun Chung positioned artificial intelligence as a catalyst for industrial transformation and a driver of significant growth.**
He argued that the group’s vast troves of data on moving physical assets—vehicles and robots—along with detailed manufacturing process information give Hyundai a competitive edge that big tech rivals will struggle to replicate. Chung urged faster, transparent decision-making, calling for prompt communication and embedding employee-led analysis and conclusions directly into reporting processes. He warned that global uncertainty—from supply chain restructuring and slowing economic growth to rising geopolitical fragmentation—will likely materialize into real risks. To respond, he advocated deep organizational reflection, quicker reporting, and greater transparency. Looking ahead, Chung identified AI, software-defined vehicles, and future mobility as core growth pillars and announced a plan to invest 125.2 trillion won (about US$86.5 billion) by 2030 in both quantitative expansion and qualitative advancement.

**Amid this push for digital transformation, the Korea Industrial Technology Promotion Association’s 2026 R&D Outlook Survey reported a strong rebound in corporate R&D sentiment.**
The investment index jumped to 99.7 from 79.6 in 2025, signaling stabilization after a prior decline, while the personnel index, which tracks researcher hiring sentiment, rose to 94.9 from 84.2. Companies cited expanding existing operations (30.5%), pursuing new digital businesses—particularly AI-related ventures (19.0%)—and strong management willingness to invest (18.4%) as primary drivers of increased R&D spending, whereas investments toward carbon neutrality remained low at 2.3%. Mid-sized firms led the charge with an investment RSI of 103.1, while large and small enterprises held steady. Sector analysis showed robust investment and hiring in electrical and electronics—led by semiconductors (investment RSI 110.7, personnel RSI 104.2)—and positive trends in machinery, information and communications, and chemicals. In contrast, construction, materials, and automotive sectors continued to contract, all with indices below 91. Industry leaders stressed that a supportive policy environment remains essential to sustain selective and concentrated R&D investments.

**Samsung Electronics outlined a company-wide strategy to embed AI technology across its entire product lineup and realize a vision of becoming an “AI companion” in daily life.**
President Roh Tae-moon introduced the Vision AI Companion platform for TVs, which offers improved contextual understanding, and unveiled HDR10 Plus Advanced to enhance display performance in 2026 models. In home appliances, Samsung plans to integrate advanced screens, cameras, and voice-recognition systems within its SmartThings ecosystem to enable seamless inter-device communication and automate household tasks. The company will also expand AI features in Samsung Health, using user data to personalize wellness guidance, detect chronic disease risks, offer nutritional recommendations, and provide new tools for monitoring cognitive health.

**LG Electronics will showcase AI-powered home appliances at CES 2026 under the theme “Zero Labor Home, Make Quality Time.” The centerpiece of its exhibition, the LG CLOiD robot, employs AI and robotics to perform household chores such as cooking and laundry, adapting to individual user routines to streamline daily tasks.**

Bribery and Obstruction Allegations Shake Democratic Party Leadership

Jan. 6, 2026 | Governance & Law

Bribery and obstruction allegations have emerged against a ruling Democratic Party lawmaker.

**Kim Byung-gi has denied receiving nomination money or obstructing investigations into his wife’s alleged misappropriation of operating expenses.**
He acknowledged personal mistakes but maintained there are no legal grounds for the charges. Despite growing calls for his resignation or expulsion, Kim said he will remain in the party and will not step down voluntarily.

**On December 30, 2025, Kim resigned as the party’s floor leader after reports surfaced that former lawmaker Kang Sun-woo received 100 million won in 2022 in exchange for a city councilor nomination.**
Kang, who served with Kim on the nomination management committee—Kim as secretary, Kang as a member—was expelled from the party the following day.

**Suspicions against Kim also include allegations that he accepted tens of millions of won from district councilors in return for nominations before the 2020 general election and impeded investigations into his wife’s expenses in 2024.**
Police have opened a probe under the Improper Solicitation and Graft Act, dereliction of duty, and abuse of official authority. Kim insists the councilors were electoral competitors, not candidates, and has asked for time to clarify the facts.

**On January 5, the opposition People Power Party accused Kim and independent lawmaker Kang Sun-woo of forming a “nomination bribe cartel” and urged the appointment of a special prosecutor.**
PPP leader Jang Dong-hyeok pointed to evidence such as a recorded plea by Kang and alleged that police inquiries were passive and influenced by aides to President Lee Jae-myung.

**In response, the Democratic Party rejected any connection between the allegations and President Lee Jae-myung, noting that a different emergency committee system was in place at the time and Lee did not serve as party leader.**
Spokesperson Kim Hyun-jung called the PPP’s claims false, demanded an apology from Jang Dong-hyeok, and warned of possible legal action if he fails to retract his statements.

**Also on January 5, a civic group focused on judicial justice filed a complaint against Rep.**
Kim Byung-gi, accusing him of receiving illegal political funds from two local councilors in his Seoul constituency in 2020 and returning the money three to five months later. The group further alleged that Kim accepted an expensive accommodation voucher from Korean Air. Separately, the group lodged a complaint against Kim Hyun-ji, a personal secretary to President Lee Jae-myung, alleging she condoned the misconduct while serving as the Democratic Party chairperson’s secretary.

Monitored Intelligence for South Korea - Jan. 7, 2026

News
Media
282

Government
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10

City/State
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27

Embassy
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0

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Erudite Risk takes an all risks approach to intelligence reporting. We categorize key intelligence into one of 40 different risk intelligence categories.

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美 투자 한국기업, 법인세 15% 미달해도 과세 안해

US Taxes on Korean Companies Not Imposed Even If Corporate Tax Falls Below 15%

Hankyung | Local Language | News | Jan. 7, 2026 | Regulation

A new international tax framework known as the "Side-by-Side Package" system has been established, allowing the global minimum tax and individual countries' minimum tax systems to coexist independently. This was finalized by over 145 OECD and G20 member countries and comes into effect this year. Under this system, if a country operates a qualified side-by-side regime similar to the global minimum tax, foreign subsidiaries of multinational companies in that country will not be subject to the global minimum tax because taxing rights primarily belong to the company's home country.

Since 2024, countries including South Korea, the European Union, and Japan have implemented global minimum tax systems adhering to international standards. The United States operates its own minimum tax system, which has been recognized internationally as a qualified side-by-side regime. Consequently, large U.S. tech companies like Google, Apple, and Netflix will not face the global minimum tax in other countries on income earned after January 1 of this year.

This agreement benefits Korean companies operating in the U.S., particularly domestic automakers and battery producers receiving U.S. Inflation Reduction Act (IRA) subsidies. The South Korean Ministry of Finance and Economy clarified that even if effective corporate tax rates fall below the 15% minimum due to overseas tax credits, these companies will not be liable for additional global minimum tax payments. Eligible tax incentives include South Korea’s integrated investment tax credit, R&D tax credit, and the U.S. IRA advanced manufacturing production tax credit, which the government has actively advocated for in international negotiations.

LG엔솔, 1분기 각형 배터리 투자 개시…테슬라·GM 공급 채비

LG Energy Solution begins investment in prismatic batteries in Q1… Preparing to supply Tesla and GM

ET News | Local Language | News | Jan. 7, 2026 | UndeterminedTech Development/Adoption

LG Energy Solution is initiating capital investment in equipment for mass production of prismatic batteries starting in the first quarter of 2026. Prismatic batteries, valued for their durability and safety, are increasingly in demand for energy storage systems (ESS) and electric vehicles. The company is currently selecting equipment suppliers, with investments planned through the second quarter. LG Energy Solution has established a prismatic battery pilot line at its Ochang plant in North Chungcheong Province, where R&D and mass-production testing have been conducted.

LG Energy Solution aims to first produce prismatic batteries for Tesla’s ESS under a supply contract worth 6 trillion won signed in July 2025, with deliveries starting in August 2027. Additionally, the company is preparing to supply lithium-manganese-rich prismatic batteries to General Motors for electric vehicles beginning in 2028. To support these plans, LG Energy Solution intends to convert its Lansing, Michigan plant’s pouch-type battery line to prismatic production, reflecting a strategic move to meet growing demand for prismatic cells in North America, driven by surging ESS demand linked to AI advancements.

The competition among equipment suppliers is expected to be intense due to the unique assembly processes required for prismatic batteries, which differ significantly from pouch cells. LG Energy Solution is demanding significant price reductions from suppliers to reduce costs. Industry sources indicate uncertainty among equipment manufacturers regarding pricing levels, with a possibility that price-competitive Chinese firms may win some contracts amid a general industry slowdown in new battery investments caused by a downturn in the electric vehicle market.

지평, ‘2025 건설준법대상’에서 ‘건설법무’, ‘신탁’ 2개 부문 최우수상 수상

Jipyung wins top awards in two categories, Construction Legal Affairs and Trust, at the 2025 Construction Compliance Awards

Jipyong LLC | Local Language | AcademicThink | Jan. 7, 2026 | UndeterminedLegal Exposure

Jipyung won the top awards in the “Construction Legal Affairs” and “Trust” categories at the 2025 Construction Compliance Awards held on December 18 in Seoul. The awards, hosted by Daehan Economy and the Association of Legal Officers of First-Tier General Construction Companies, assess law firms based on performance capabilities and client satisfaction through document review and surveys.

In the Construction Legal Affairs category, Jipyung earned recognition for its advisory work with KB Asset Management on the KRW 900 billion sale of Seoul International Tower in Yeoksam-dong. The firm was praised for its structured transaction advice and effective stakeholder coordination and risk diagnosis throughout the sale process.

For the Trust category, Jipyung advised KB Real Estate Trust on the sale of Gangnam N Tower under a share deal and capital reorganization structure. The firm’s strengths included practical issue analysis, response, and preemptive structural risk evaluation, which secured them the top prize in this category.

Attorney Lee Seung-hwan, who led both cases, received the awards on behalf of Jipyung. The firm’s Construction & Real Estate Group and REITs & Fund Group, with about 70 lawyers and specialists, offer comprehensive advisory and litigation services, leveraging their extensive experience in construction and real estate law. Jipyung plans to continue providing systematic legal advice based on this expertise.

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