Semiconductors and K-Beauty to 'Grow' Next Year, While Steel and Shipping Face 'Challenges'

Samjong KPMG Releases "2026 Domestic Economic and Industrial Outlook"
"Speed of Adapting to Technological and Policy Changes Determines Corporate Competitiveness"

Among 23 major domestic industries, the semiconductor and cosmetics sectors are projected to have the brightest outlook next year, according to a recent survey. In contrast, six industries, including automobiles, steel, and shipping, are expected to face sluggish performance due to deteriorating market conditions.

On December 4, Samjong KPMG published its report titled "2026 Domestic Economic and Industrial Outlook." Samjong KPMG releases this annual industry outlook report to support corporate strategy development amid ongoing uncertainty in the business environment.

Industry Outlook for Next Year: Export Diversification and Strategic Planning Essential

Regarding the semiconductor industry, Samjong KPMG expects growth in the Integrated Circuit (IC) segment to drive the overall market upward next year. The report states, "High-performance memory such as High Bandwidth Memory (HBM) is becoming a core infrastructure in the AI era, raising expectations for increased sales among domestic companies." The report also analyzes that "as AI traffic continues to grow, securing high-performance semiconductors and upgrading product portfolios will be decisive factors for corporate growth."

For K-beauty, the report anticipates solid growth driven by export diversification toward non-Chinese markets such as the United States, Japan, and Europe. Amid the rise of indie brands and market expansion, key strategies for domestic cosmetics companies include nurturing promising brands, strengthening brand portfolios, and targeting emerging markets like the Middle East and Latin America.

Industries such as smartphones, shipbuilding, pharmaceuticals, and aviation received positive evaluations. In the smartphone industry, the competitive landscape is expected to be reshaped by enhanced AI features and innovations in form factors such as foldable phones. Securing high-performance application processors (AP) and improving productivity have emerged as major challenges, and responding to cost pressures is becoming increasingly important.

The domestic shipbuilding industry is expected to show a gradual recovery based on existing order backlogs, despite a decline in global new ship orders. Demand for eco-friendly, high-value-added vessels such as LNG and LPG carriers remains steady, while investments in next-generation fuel ships, shifts in production portfolios, and expanding defense demand in North America, Europe, and Southeast Asia are cited as mid- to long-term opportunities.

The pharmaceutical and bio industries are expected to see intensified R&D competition as AI-based new drug development ecosystems take off in earnest. The report emphasizes the need to strengthen pipelines centered on obesity, metabolic diseases, and anticancer drugs, as well as to expand production capacity in high-value-added areas such as cell and gene therapies, given the intensifying competition in the CDMO (Contract Development and Manufacturing Organization) market.

For the aviation industry, the report notes that the recovery in international passenger demand continues, and that route and fleet operation efficiency through the restructuring of integrated airlines and low-cost carriers (LCCs) has become a key task. Restructuring businesses around high-value cargo and responding to logistics changes driven by AI and HBM are cited as core strategies for long-term competitiveness.

The OTT (over-the-top streaming) market is entering a phase of revenue model restructuring amid saturation, while the entertainment industry is seeing strengthened global growth momentum thanks to the resumption of large-scale IP (intellectual property) activities and the easing of China's import ban on Korean content. The banking and securities sectors are required to expand corporate finance, accelerate digital transformation, and strengthen capital amid policy shifts.

Industries such as display, energy, and construction are given a 'neutral' outlook. For the display industry, the report points out that the gap in global market share with China is widening, and domestic companies need to strengthen strategies focused on high-value-added products such as automotive displays. Exploring new business opportunities across the display value chain in response to changes in global cooperation and competition is also highlighted as a major task.

Regarding energy and utilities, the report states, "With rising electricity demand and changes in the government's energy mix, the transition toward renewable energy will accelerate," adding, "Companies need to realign their business models according to each energy source."

In addition, the report analyzes that structural changes are taking place across industries, including expanded public SOC (social overhead capital) investment, changes in the gaming industry structure due to the introduction of generative AI, polarization in the retail sector, and strengthened sustainability strategies in the fashion industry.

Industries such as automobiles, steel, and shipping are given a 'negative' outlook. For the automobile industry, the report notes that the expiration of the U.S. electric vehicle tax credit and the reduction of new energy vehicle purchase incentives in China may somewhat slow electric vehicle growth in certain major countries. However, it also points out that growth in hybrid vehicles in the U.S. and expansion of the electric vehicle market in emerging countries are expected, making differentiated strategies by country essential.

The domestic steel industry is expected to see only a limited recovery due to intensified price competition and a slowdown in the construction sector, even as global steel demand improves. Shifting to high-value-added products and adjusting excess capacity have been identified as key tasks.

In shipping, the report notes that overcapacity and geopolitical risks may limit freight rate recovery, while the refining and chemical industries are facing intensified pressures from oversupply and restructuring. In finance, card and mutual finance sectors are expected to continue experiencing negative market conditions due to strengthened regulations and increased concerns over financial soundness.

Trump, Monetary and Financial Market Volatility as Key Variables

Samjong KPMG has identified the following as major economic issues for next year: the Trump risk, entrenched low growth and widening polarization, expansionary fiscal policy, the possibility of monetary policy easing, and financial market volatility. The report explains, "As U.S. tariff measures are implemented in earnest and policy uncertainty grows ahead of the midterm elections, Korean companies must prioritize diversifying export markets and strengthening regulatory response systems." It also notes, "With prolonged economic sluggishness and widening gaps in assets, income, and technology, investment in innovation and productivity improvement based on digital technology have emerged as common challenges across all industries."

The report continues, "With the government expanding domestic demand and fostering advanced industries, it is essential to discover projects linked to government policy and strengthen cooperation with the public sector. Although there is a possibility of a base interest rate cut, given the high volatility in monetary policy paths and financial markets, companies need to realign their capital-raising strategies." In particular, scenario-based portfolio management, currency hedging, and diversification strategies are identified as key risk management elements amid concerns over an AI bubble, high exchange rates, and increased financial market volatility.

This content was produced with the assistance of AI translation services.