South Korea’s corporate landscape is undergoing a major shake-up as defense, shipbuilding, and artificial intelligence (AI)-driven companies rise, while traditional industrial giants struggle. According to an analysis by Chosun Ilbo based on Korea Exchange data, SK Group has overtaken LG Group to claim the No. 2 spot over the past year, while HD Hyundai and Hanwha Group have surged to fifth and sixth place, respectively. Traditional industry leaders like POSCO Group, Kakao, and Naver have all seen their rankings drop.
As AI, shipbuilding, and defense industries rise globally, sectors like steel and secondary batteries are struggling amid Trump administration policies and China’s low-cost competition. Investors are responding swiftly to these shifting market dynamics, driving rapid changes in capital markets.
Market capitalization, influenced by stock prices, is not a direct measure of a company’s competitiveness, as stock prices are often affected by short-term performance and forecasts. However, both stock prices and market capitalization reflect investors’ evaluations of how well a company handles internal and external factors and its preparedness for future industries. As such, the rapid changes in market rankings suggest that South Korean industries are undergoing a fast-paced restructuring.
HD Hyundai and Hanwha Group stand out the most in market rankings by Feb. 5. HD Hyundai, which ranked eighth at the end of 2023, has increased its market cap by 2.3 times in just a year, climbing to fifth place. Hanwha, with a 23.1 trillion won increase in market value, jumped from 10th to sixth place, surpassing POSCO, Kakao, and Naver. Both groups specialize in shipbuilding and defense, sectors securing numerous global contracts, with two of Korea’s top three shipbuilders—HD Korea Shipbuilding & Offshore Engineering and Hanwha Ocean—serving as key affiliates.
Hanwha Aerospace, the group’s defense arm, had an order backlog of 29.9 trillion won by the third quarter of last year, leading its stock price to more than triple since the end of 2023. HD Hyundai Electric, an energy infrastructure company, topped KOSPI stock price growth last year, soaring by 377% due to the rising demand for power systems in data center construction amid the AI boom.
The AI boom has also impacted other top companies. SK Group, with SK Hynix leading the high-bandwidth memory (HBM) chip field, surpassed LG Group to take second place, with SK Hynix’s market value now around 149 trillion won. Samsung Group retained its top position, but the AI-driven shift had a significant effect. Due to poor performance in the HBM sector, Samsung Electronics saw a sharp decline in stock price, dropping the group’s market value by 142.2 trillion won compared to late 2023.
South Korea’s leading IT firms, Kakao and Naver, dropped three spots to ninth and tenth place, respectively, as their market caps declined amid concerns over their lack of AI competitiveness compared to global tech giants.
Companies in steel, retail, and petrochemicals have also suffered due to increased competition from China. POSCO Group’s market cap halved from 93.9 trillion won at the end of 2023 to 41.1 trillion won on Feb. 5, pushing its ranking from fifth to seventh. The influx of cheap Chinese steel led to production cuts and factory shutdowns, while its battery materials business suffered from the global slowdown in electric vehicle demand. LG’s fall to third place was primarily due to the struggles of its key subsidiaries, LG Chem and LG Energy Solution, which faced setbacks in the petrochemical and battery sectors.
Retail giants have also struggled. Lotte Group and CJ Group, which ranked 12th and 13th at the end of 2023, tumbled to 18th and 19th place, respectively, as inflation and sluggish domestic demand took a toll. Both were slow to respond to the rise of online shopping, while Lotte was further weighed down by weak performance in its petrochemical unit, Lotte Chemical.
