South Korean large corporations posted a remarkable ₩156 trillion in operating profit for the first quarter of 2026, a figure that tells a story of multiple tailwinds converging at once.
At the heart of this surge is the semiconductor industry, which is experiencing a powerful rebound. The primary driver is the explosive demand for AI, which has significantly pushed up prices for memory chips like DRAM and NAND. Samsung Electronics and SK hynix, the giants of this sector, alone accounted for over 60% of the total profit. This isn't a sudden event; market analysts at TrendForce had already predicted in January that memory prices would rise, with supply being prioritized for high-demand AI and server applications. SK hynix further confirmed this trend by stating that customer demand for its HBM (High Bandwidth Memory) already exceeds its production capacity for the next three years.
Secondly, the energy and petrochemical sectors provided a significant, though likely temporary, boost. Geopolitical tensions in the Middle East caused crude oil prices (WTI) to spike above $100 per barrel in March. This led to substantial 'inventory valuation gains' for refiners. Essentially, the oil they had bought earlier at lower prices became more valuable, inflating their profits on paper. S-OIL, a major refiner, even stated that these inventory and lagging effects accounted for more than half of its operating profit. However, this effect is expected to reverse in the second quarter as more expensive crude oil enters the production process.
Finally, a booming stock market played a supporting role. With the KOSPI reaching an all-time high in April, trading activity surged. This translated into record-breaking profits for brokerage firms, which added to the overall impressive earnings figure for large corporations. The weak Korean won, which surpassed 1,500 per dollar, also amplified the profits of exporters when converted back into local currency. In summary, the record-breaking quarter was not due to a single factor but a powerful combination of a structural AI boom, a temporary energy price shock, and a cyclical market rally.
- HBM (High Bandwidth Memory): A type of high-performance memory chip essential for AI accelerators and supercomputers, designed to process massive amounts of data quickly.
- Inventory Valuation Gain: Profit that occurs when the market value of a company's existing inventory increases. For oil refiners, this happens when crude oil prices rise after they have purchased their stock.
- Lagging Effect: In the refining industry, this refers to the profit generated from the time lag between purchasing crude oil and selling the refined products, especially when prices are rising during that period.