Weekly Supply Chain in Asia 2026-W28 (2026-07-02~2026-07-08)

The inclusion of AI subscription fees in the Consumer Price Index and the expansion of corporate AI projects defined this week’s landscape. As South Korea and Japan navigate the intersection of digital service inflation and a resource-centered shift in industry, AI has entered deeply into the consumption landscape of Korean households. This shift is accompanied by a defensive posture in financial markets, where corporate entities and governments are deploying tactical buffers to manage the volatility of currency, energy, and regulatory environments.

This Week’s Events

The integration of AI into the core of the economy is no longer confined to industrial procurement. The South Korean government’s decision to include AI subscription fees—such as those for ChatGPT, Gemini, and Claude—in the Consumer Price Index (CPI) effective December 18, 2026, is part of the five-year rebalancing of the index. With service items increasing from 53.3% to 57.8% of the index, the pricing policies of international AI platforms are expected to affect Korean consumer prices. Separately, Lotte Group is implementing a comprehensive AI Transformation (AX) across its subsidiaries. By utilizing platforms like iMember, Lotte has achieved 90% accuracy in palm oil price predictions at Lotte Wellfood and reducing legal review time by over 50% at Lotte Chilsung Beverage. AI is now both a tool for corporate efficiency and a standard household expense.

This digital transformation is occurring alongside a period of significant currency and financial volatility. Corporate USD deposits at South Korea’s four major commercial banks reached USD 48.3B as of July 2, 2026, an 18% increase over four months. Companies are retaining USD rather than converting to KRW to hedge against currency depreciation and interest rate differentials. This “dollar parking” creates a structural bottleneck in the foreign exchange market, reducing USD supply and exerting downward pressure on the KRW. Meanwhile, in Indonesia, Woori Saudara Bank, an Indonesian commercial bank majority-owned by South Korea’s Woori Bank, is diversifying its revenue streams to mitigate the impact of a 5.75% benchmark interest rate, focusing on trade finance and digital services, which an analyst describes as a stable revenue source less sensitive to interest rate changes.

The physical infrastructure required to support the AI boom is also facing significant constraints. Doosan Enerbility, a South Korean power-equipment maker formerly known as Doosan Heavy Industries, is reporting lead times of 3 to 5 years for gas turbines, driven by the power-intensive requirements of hyperscale AI data centers. With gas turbine prices exceeding KRW 383 billion per unit, the company plans to maximize this opportunity through Long-Term Maintenance Service (LTMS) contracts. Separately, the South Korean government is reviewing the integration of its airport management entities, inspired by the Spanish AENA model. Supporters of integration expect it to prevent duplicate investment, improve new route launches and connectivity between the hub and regional airports, and share the burden of chronic-deficit regional airports.

Strategic pivots are also reshaping the industrial landscape. POSCO Group announced a KRW 16.7T investment plan through 2028 to transition to a “triple core” system covering steel, secondary battery materials, and energy. To fund this, POSCO Holdings will divest stakes in listed subsidiaries—including POSCO International, POSCO DX, and POSCO Future M—down to a 50% management control threshold, aiming to secure KRW 3.82T in cash. This divestment is a multi-year process designed to secure the capital necessary to meet the group’s 2028 investment targets. This move represents a major transformation beyond the core steel business into a resource-centered structure, through which the group plans to lead the strengthening of industrial supply chains.

Regulatory and environmental pressures continue to influence operational viability. The Korea Exchange implemented stricter delisting requirements for KOSDAQ, placing 226 companies with a market capitalization below KRW 20B at risk. This creates structural tension for R&D-heavy sectors like biotech, which may be forced to prioritize short-term financial compliance over long-term innovation.

Internationally, the Chinese battery separator manufacturer Semcorp (Yunnan Energy New Material Co., Ltd.) faces production halts in Hungary following environmental incidents involving groundwater contamination. In Japan, SNS-based investment fraud reached JPY 127.4 billion in 2025, according to the Japanese National Police Agency. Finally, LIG Defense & Aerospace (formerly LIG Nex1) has been reviewing local business in Canada to support the Canadian Patrol Submarine Project, having signed partnerships with the local sonar developer GeoSpectrum Technologies Inc. and the global engineering firm AtkinsRéalis as it sought to enter Canada and expand its local network.

Looking Ahead

The coming weeks will be defined by the execution of these strategic and regulatory shifts. Investors should monitor the timeline for POSCO’s subsidiary divestment, as the successful acquisition of KRW 3.82T is critical to its triple-core transition. The impact of the new KOSDAQ delisting rules on biotech R&D will be a key indicator of whether the market can balance financial integrity with innovation. Finally, the subscription pricing strategies of major AI providers will be under close scrutiny, as their inclusion in the CPI means these costs are expected to affect Korean consumer prices. The challenge for the remainder of the year will be managing the physical and financial bottlenecks these shifts have exposed.