South Korea

Intelligence for Better Decision Making

Naver and Kakao Accelerate AI-Driven Infrastructure Development to Support Next-Generation Services
Nov. 18, 2025 | Technology & Innovation

Cloud computing platforms and data centers are evolving rapidly to meet the demands of expanding AI workloads.

**Naver invested 1.6262 trillion won in R&D during the first three quarters of 2025, a 19.6 percent increase from the same period last year, putting it on track to surpass 2 trillion won for the full year.**
The company is pursuing 151 distinct R&D projects, many aimed at creating AI agents for shopping, video services, DevOps tools driven by large language models, and browser-based interactions.

**Over the same period, Kakao spent 962.6 billion won on R&D, a 0.9 percent decline from 2024, yet it expects to match or exceed its 2024 full-year R&D total of 1.2696 trillion won.**
Kakao’s research chiefly focuses on building an AI agent ecosystem that integrates seamlessly with its flagship KakaoTalk messaging platform.

**Both companies have boosted infrastructure outlays to sustain AI workloads.**
In Q3, Naver directed 218.6 billion won to GPU-related infrastructure, up 22.7 percent year-on-year, and plans to invest 1 trillion won in overall infrastructure this year, followed by another 1 trillion won earmarked for GPUs in 2026. In the same quarter, Kakao raised its infrastructure and outsourcing spending by 34 percent to 261 billion won, driven by enhancements to its AI service infrastructure and projects tied to SM Entertainment.

**Naver and Kakao each reported record revenue and operating profit in Q3 2025, and both management teams have pledged to channel those gains into further technology development.**
They aim to accelerate AI integration in the second half of the year and roll out “AI agents” as core service offerings next year, leveraging advanced large language models and expanded GPU capacity to provide personalized, real-time assistance in e-commerce, content delivery, and communications.

**At recent industry conferences, Naver’s CEO Choi Su-yeon introduced the “AgentN” strategy, which unites multiple AI agents into a single platform covering search, commerce, and messaging.**
Kakao’s CEO Jung Shin-a outlined sweeping AI upgrades for KakaoTalk and other services, emphasizing context-aware, agent-based user experiences. Both executives stressed that proprietary AI models and large-scale compute capacity are vital to delivering these next-generation capabilities.

**Academic and industry experts view these investments as a strategic move toward technological self-reliance and market leadership in AI.**
Korea University professor Lee Seong-yeop argued that building interoperable ecosystems—linking search, commerce, and messaging through robust computational infrastructure, proprietary large language models, and real-time personalization—is critical for maintaining long-term competitiveness in the rapidly evolving AI landscape.
Semiconductor-Led Industrial and Export Growth Drives South Korea’s Third Quarter Economic Gains
Nov. 18, 2025 | Macroeconomics & Growth

South Korea’s industrial output in the third quarter of 2025 showed robust gains across manufacturing, retail and services, supported by strong export demand and targeted government measures.

South Korea’s industrial production rose 5.8 percent year-on-year in the third quarter of 2025, reflecting continued momentum in key manufacturing sectors and bolstering overall economic performance for the period.

**The semiconductor and electronics sector drove industrial growth, with output climbing 16.5 percent in July–September.**
Automobile manufacturers also boosted production, which increased 7.5 percent over the same period, demonstrating the strength of the country’s export-oriented manufacturing base.

**Regionally, North Chungcheong Province led all areas with a 19.1 percent year-on-year increase in industrial output, followed by Gyeonggi Province at 15.9 percent, both benefiting from dense concentrations of chip fabrication and electronics assembly facilities.**
In contrast, production contracted in Seoul, South Jeolla Province and Jeju Island, reflecting uneven regional industrial dynamics.

**On the domestic front, retail sales rose 1.5 percent year-on-year in the third quarter, aided by government cash handouts designed to spur private consumption.**
Sejong recorded the largest increase at 8.8 percent, while Incheon and Daegu saw gains of 5.5 percent and 5.3 percent, respectively. Seoul and Jeju experienced declines of 2.7 percent and 1.3 percent.

**The service sector expanded 3.1 percent nationwide in the third quarter, led by Seoul’s 6.1 percent growth.**
Ulsan and Gyeonggi Province followed with increases of 5.3 percent and 4.9 percent, demonstrating the ongoing recovery in domestic services demand and urban economic activity.

**Exports grew 6.5 percent year-on-year in the third quarter of 2025 as strong global demand drove shipments of semiconductors, ships and automobiles.**

Monitored Intelligence for South Korea - Nov. 19, 2025


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이번에는 '짱구'에 불통 뛴 중·일 갈등…"日 영화 상영 중단"

This time, conflict between South Korea and Japan erupts over Crayon Shin-chan… Japanese film screenings suspended

Hankyung | Local Language | News | Nov. 19, 2025 | Geopolitical Conflict and Disputes

Japan’s Prime Minister Sanae Takaichi's remarks on a possible Japan intervention in a Taiwan contingency have triggered a significant backlash in China, leading to restrictions on Japanese cultural imports, including the suspension of Japanese film screenings. Chinese authorities and distributors decided to halt the release of several Japanese movies, notably "Crayon Shin-chan: Super Gorgeous! The Blazing Sapling Village Dancers" and "Cells at Work," citing unfavorable market conditions and negative public sentiment following Takaichi's comments.

State-run China Central Television (CCTV) reported that after the remarks, box office revenues for Japanese films, including the recent release of "Demon Slayer: Muhanseong-hen," sharply declined. Chinese distributors and importers expressed concerns that Japan’s provocative statements were influencing audience reception and chose to suspend upcoming Japanese film showings out of respect for the market and viewers. Additionally, China has issued advisories discouraging travel and study in Japan, framing Japan as a public safety concern.

The tension follows Takaichi’s unprecedented statement in the Japanese House of Representatives that a Taiwan contingency could threaten Japan’s survival and justify collective self-defense. China has strongly protested and escalated diplomatic pressure, warning of further measures if Takaichi does not retract her remarks. Analysts highlight that while China may intensify economic pressures, such as controls on rare earth exports critical to Japanese industries, Takaichi is unlikely to back down due to her strong domestic political standing.

Observers suggest that a reconciliation between China and Japan may occur after a cooling-off period, as seen in past disputes, but Japan is expected to face ongoing diplomatic and economic risks in the interim. The situation remains precarious, with potential for further escalation involving strategic economic resources controlled by China.

Land Ministry may have uncovered 290 illegal housing transactions by foreigners

Joongang Ilbo | English | News | Nov. 19, 2025 | Corporate Corruption or Fraud

The Ministry of Land, Infrastructure and Transport in South Korea reported potentially uncovering 290 illegal housing transactions by foreigners. These findings stem from an analysis of 438 housing deals involving foreign buyers between June 2024 and May 2025, revealing irregularities in 210 transactions. Suspected violations include false transaction reports, illicit gifting, illegal overseas funds, misuse of trusts, unauthorized loans, and running rental businesses without proper qualifications.

The majority of cases involved buyers from China (125 cases), followed by the United States (78), Australia (21), and Canada (14). Specific instances cited include a buyer registering family members as tenants under a large jeonse deposit contract and borrowing from them, raising concerns over related-party transactions. Another case involves a foreigner on a working visa operating an unauthorized rental business in Incheon, which is under investigation for illegal rental income.

Current laws impose severe penalties for such violations, with prison sentences up to five years and fines reaching 200 million won for offenses like falsified registrations and misuse of trusts. Unauthorized rental operations can result in up to three years imprisonment or fines of 30 million won. The government plans to enhance penalties and enforcement measures, with further actions to be determined in upcoming meetings. Investigations into suspicious foreign transactions involving nonresidential properties and land are expected to conclude by the end of 2025.

Seoul to start publishing report on trade barriers akin to USTR's annual NTE report from 2026

Yonhap | English | News | Nov. 19, 2025 | Regulation

Starting in 2026, South Korea's Ministry of Trade, Industry and Resources will begin issuing regular reports on foreign trade barriers to better address policies negatively impacting South Korean companies. This initiative was announced at a public-private conference involving government officials and representatives from key industries such as batteries, steel, and biopharmaceuticals.

The forthcoming reports will resemble the U.S. Trade Representative's National Trade Estimate (NTE) Report on Foreign Trade Barriers. The move follows a recent trade agreement between Seoul and Washington, which includes commitments to tackle various trade obstacles, including issues related to Seoul's regulations on digital services and automobile imports.

The ministry plans to develop a database cataloging foreign trade barriers encountered by Korean firms abroad and analyze their effects. This effort aims to foster a more favorable overseas business environment for domestic industries. Trade Minister Yeo Han-koo emphasized the need for proactive trade policies in response to evolving global trade dynamics despite the recent U.S.-Korea trade negotiations.

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