Seoul will double its spending on artificial intelligence and semiconductors by 2027, reaching a record level of $16 billion, South Korean President Lee Jae-myung said Monday in his annual budget speech to Parliament.
The country is a technological center of gravity, home to Samsung and SK Hynix, two of the world's three largest manufacturers of memory chips, components in high demand thanks to the artificial intelligence boom.
“We will allocate 21.3 trillion won ($16 billion) for semiconductors, physical AI and AI data centers, the three major projects, in addition to investing in artificial intelligence in an amount nearly double what was allocated this year,” Lee said.
He added: “We will make bold investments in artificial intelligence and future growth engines, in order to enhance the growth potential of our economy, which represents the pillar of its economic strength.”
He pointed out that the government will invest 4.7 trillion won to support “pioneering artificial intelligence development projects with the aim of achieving world-class performance for our artificial intelligence model, which is a national strategic asset.”
He presented this proposal in a speech reviewing his government's spending plans for 2027.
The proposed budget amounts to 821 trillion won, an increase of 12.8 percent from the current year, making it the largest budget proposal ever.
Lee now needs Parliament to approve the budget proposal, which is likely given the majority his party enjoys.
South Korea's S-Oil, a unit of Saudi Aramco, expected on Monday that refining profits in Asia would be strong during the fourth quarter of the year, due to a decline in global inventories of key products and increased demand for heating purposes.
The company said in its earnings statement that the operating rate of the crude distillation unit reached 81 percent in the third quarter, compared to 80 percent in the first half of 2026, and 96 percent in 2025.
It is expected that the operating rate of the crude distillation unit will increase in the fourth quarter by obtaining supplies of Arab Medium crude.
The company expects refining margins to remain strong even if conflicts involving Russia and the Middle East end; Because repairing the damaged facilities will take a long time.
S-Oil is in talks with the South Korean government to obtain compensation due to the ceiling imposed by the government on fuel prices.
The global lubricant shortage is expected to continue into 2027, the company said.
S-Oil relies on two routes in Saudi Arabia to ship crude oil.
The pace of growth in Japan's manufacturing sector activity slowed last month, according to an economic report published on Monday.
Standard & Poor's Global Consulting reported that the purchasing managers' index for the manufacturing sector in Japan declined last month to 53.3 points, compared to 54.1 points during the previous month.
An index reading of more than 50 points indicates growth in economic activity for the sector, while a reading of less than 50 points indicates a contraction in activity.
As has been the case since the beginning of this year, manufacturing companies in Japan recorded a new increase in new orders during October.
Qualitative evidence collected through the survey indicated increasing customer demand, particularly in the semiconductor sector and associated markets.
The recent increase in sales was driven, in part, by a new surge in new business from abroad.
Although growth rates of total new orders - including orders from abroad - remained strong by historical standards, they recorded their weakest levels since last March.
Japan's manufacturing sector production also continued to grow during October for the tenth month in a row, in line with the increase in the volume of new business, but the pace of this growth was the slowest since the end of the first quarter of the current year.
