🧠 Food for thought

Implications, context, and why it matters.

South Korea’s economy is already under strain from the energy shock

• South Korea depends on the Strait of Hormuz for about 70% of its crude oil imports 1.
• After the war began, the KOSPI stock index (Korea Composite Stock Price Index, South Korea’s benchmark stock market index) logged its biggest two-day drop on record, while the currency slid to levels last seen during the Global Financial Crisis 2.
• The government has floated a 25 trillion won (US$16.6 billion) budget, plus price caps on refined petroleum products for the first time since 1997 2.
• South Korea’s grid functions as an “energy island,” so it cannot pull in electricity during emergencies and that leaves it more exposed to fuel shipments 3.

Korea’s energy crisis threatens the global AI and electronics supply chain

• South Korea’s semiconductor giants, including Samsung and SK Hynix (a major South Korean maker of memory chips used in servers and AI systems), produce a dominant share of the memory chips used across AI and cloud infrastructure 3.
• Power instability can interrupt chip output, while the conflict also puts pressure on inputs since South Korea gets 97.5% of its bromine from Israel and 64.7% of its helium from Qatar 2.
• Shortages already reach beyond electronics, with LG Chem (LG’s chemicals manufacturing arm) declaring force majeure (a legal notice that it cannot meet supply obligations due to events beyond its control) on exports of dioctyl terephthalate (a chemical plasticizer used to make plastics flexible), which touches goods from plastic trash bags to car parts 2.
• The government is restarting nuclear reactors and loosening limits on coal plants to buy time, while the situation adds urgency to cutting imported-fuel dependence and building longer-term resilience through renewables 1.