The Minute to Read (Weekdays) series provides a quick overview of significant events in Korea everyday, conveniently condensed into a one-minute read. Here’s a recap of what happened yesterday: Feb. 12.
South Korea’s economic reforms stall as opposition blocks tax cuts
South Korea’s economy is struggling with weak domestic demand and tariff disputes linked to U.S. President Donald Trump, yet legislative efforts to strengthen corporate competitiveness and ease financial burdens remain stalled. The opposition Democratic Party has blocked key economic bills, including tax benefits for Individual Savings Accounts (ISA) and corporate tax incentives under the “Value-Up” initiative, despite initially supporting them. These measures were derailed amid political turmoil following the Dec. 3 martial law declaration and impeachment efforts. While the ruling People Power Party (PPP) is pushing to revive the tax revisions, the opposition argues they primarily benefit the wealthy. Critics highlight contradictions in party leader Lee Jae-myung’s stance, as he calls for capital market growth while opposing policies aimed at boosting investment and stock market liquidity. With the February session potentially the last before an early election, analysts suggest the opposition is using tax legislation as a bargaining chip in broader political negotiations.
Samsung, SK Hynix face tougher competition as CXMT targets HBM
China’s ChangXin Memory Technologies (CXMT) is pushing into the high-bandwidth memory (HBM) market, challenging South Korea’s dominance in semiconductors. Despite U.S. sanctions, CXMT is advancing rapidly, investing in HBM2 production to boost competitiveness. While still nearly a decade behind Samsung Electronics and SK Hynix, the standardized nature of older HBM designs could help China close the gap faster. Its DRAM market share has grown from zero in 2020 to 5% in 2024, with DDR5 technology nearing South Korea’s levels. Though mass production remains a challenge, Chinese firms now develop sample products within a year of South Korean releases, intensifying competition. Experts warn Samsung and SK Hynix must move beyond commodity memory, focusing on processing-in-memory (PIM) and Compute Express Link (CXL) to stay ahead in AI-driven markets.
Entertainment industry bets big on virtual idols
A four-member virtual girl group, IXIA, is set to debut this year, marking Megameta Entertainment CEO Na Byeong-jun’s first virtual idol project. Major entertainment companies, including HYBE (SYNDI8) and SM Entertainment (nævis), are investing in virtual idols due to their profitability and lower risks, avoiding scandals that impact traditional idols and agency stock prices. With AI and digital technology gaining mainstream acceptance, younger audiences, especially Gen Zalpha, are embracing virtual performers. Successful groups like PLAVE and Isegye Idol have sold out concerts and topped charts, while the global virtual human market, valued at $43.3 billion in 2023, is projected to hit $1.827 trillion by 2033.
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