▲ AI PRISM* Personalized Economic Briefing
* Editor's note: AI PRISM (Personalized Report & Insight Summarizing Media) is an artificial intelligence-based personalized news recommendation and summary service developed with support from the Korea Press Foundation. It selects and provides six news items tailored to each reader type.
[Key Issues Briefing]
■ European Gates: Germany and France have agreed to tighten "Made in Europe" standards, moving to close the loophole that lets Chinese companies qualify through simple assembly. By narrowing eligibility for subsidies and public procurement to production within the European Union and requiring research and development activity to secure intellectual property, the two countries are seen as simultaneously containing China and absorbing its technology.
■ Won Stands Alone: The won has risen more than any other major currency even amid high oil prices and a strong dollar. Analysts say a record current account surplus, underpinned by memory chip exports, has offset depreciation pressure from capital outflows.
■ AI Infrastructure, Light and Shadow: LG (003550) has entered the graphics processing unit brokerage market, projected to reach 19.3 trillion won by 2033, widening its stride in artificial intelligence infrastructure. Japan's Kioxia Holdings, which makes NAND flash memory for AI servers, by contrast has seen its shares fall 63% from their peak and faces further downward pressure as margin loan balances surge.
[Top News for Corporate CEOs]
1. Germany, France Demand Local R&D and Parts as Chinese Cars Are Assembled and Labeled European
- Key points: The EU has moved to halt Chinese companies' strategy of labeling their cars European. On the 16th, Germany and France agreed to limit European recognition for vehicles receiving government subsidies and public procurement benefits to the 27 EU member states, and to require research and development activity to secure intellectual property in addition to production within the bloc. The Industrial Accelerator Act proposed earlier by the European Commission includes a standard requiring final assembly in Europe and at least 70% of parts value, excluding batteries, to be sourced from Europe. Chinese cars accounted for 9% of new vehicle sales in Europe in the first half of this year, and the consulting firm AlixPartners projected their share would rise to 16% by 2030, reaching a level equal to South Korea and Japan combined.
2. Won Rises Alone Despite Strong Dollar, Supported by Current Account Surplus
- Key points: The won has risen more than any other major currency. In the Seoul foreign exchange market on the 19th, the won closed at 1,330.3 per dollar as of 3:30 p.m., down 1.1 won from the previous session and the lowest level in two years since Oct. 2, 2024. The rate fell about 14.4% from the 1,550 range in early July to 1,331.4 on the 16th of this month. Over the same period, the dollar index, which measures the dollar against six major currencies, actually rose to 101.84 from 101.39. According to the Bank of Korea, the current account surplus from January through August this year was $279.2 billion, roughly four times the $69.7 billion recorded in the same period last year. Analysts say dollar inflows from surging semiconductor exports have offset capital outflow pressure.
3. [Exclusive] LG Enters 20 Trillion Won U.S. GPU Brokerage Market
- Key points: LG is entering the U.S. market for brokering graphics processing unit transactions. PADO, an AI company spun off in May last year from LG NOVA, the North American innovation center of LG Electronics (066570), recently unveiled a GPU trading platform called PADO Compute. The service connects cloud operators that own GPUs with AI companies seeking to rent them, and the platform, designed to let users compare rental prices and terms for Nvidia's H100, H200, B200 and B300 chips, contains more than 54,000 sets of transaction terms. The market is projected to grow to 19.3 trillion won in 2033 from 6.8 trillion won this year. With PADO's entry, LG Group is strengthening a "One LG" synergy spanning computing resource procurement, power supply, cooling and operations.
[Reference News for Corporate CEOs]
4. EcoPro BM Rights Offering Draws 103.3% Subscription, New Shares List Nov. 5
- Key points: EcoPro BM recorded a subscription rate of 103.25% in its rights offering. In the subscription open to the employee stock ownership association and existing shareholders, 10,222,629 shares were applied for against the 9,900,990 shares scheduled for issuance, and the new shares will be listed on the 5th of next month. Of the funds raised, 765 billion won will go toward investment in the BNSI nickel smelter in Indonesia and 121.1 billion won to the company's Hungarian plant, its European production base. The plan is to build a vertically integrated supply chain running from nickel raw material to precursors and cathode materials, centered on a smelter with annual capacity of 90,000 tons, to improve cost competitiveness and supply stability for high-nickel ternary cathode materials.
5. Hyundai Motor (005380) Consolidates Ground Weapons, Rotem to Build Defense Synergy
- Key points: Hyundai Motor Group is consolidating its ground weapons business, including tanks and artillery, under Hyundai Rotem (064350). Hyundai Rotem disclosed on the 19th that it will acquire the special projects division of Hyundai Wia (011210) for 358.386 billion won, a figure derived from an operating value of 480 billion won minus items including 117 billion won in land and buildings subject to lease. As a result, Hyundai Rotem, the exporter of the K2 tank, will also take on production of large-caliber artillery such as barrels for the K9 self-propelled howitzer and main guns for the K2 tank, while Hyundai Wia will realign its portfolio toward future mobility including electrification and software-defined vehicles. Hyundai Rotem's third-quarter operating profit was 247.1 billion won, down 11.0% from the same period last year and short of the market consensus estimate of 276 billion won.
6. Kioxia Down 63%, Weighed Down by 7.8 Trillion Won in Margin Debt [Market Mover]
- Key points: Kioxia Holdings faces further downward pressure as its margin loan balance surges. Bloomberg reported on the 18th, citing Tokyo Stock Exchange data, that Kioxia's margin buying balance stood at about 920 billion yen (about 7.8 trillion won) as of the 15th, the largest among listed companies. The share price has fallen 63% from its record high in June, and trading value on the 16th was 766 billion yen (about 6.5 trillion won), down 84% from the peak. Tomoichiro Kubota, senior market analyst at Matsui Securities, noted the risk that losses could widen further as margin positions reach maturity. Net profit for this fiscal year, however, is projected to reach about 5.6 trillion yen (about 47.2 trillion won), roughly 10 times last year's level, on rising NAND prices.
