Weekly Supply Chain in Asia 2026-W38 (2026-09-10~2026-09-16)

HD Korea Shipbuilding & Offshore Engineering is pushing ahead with a greenfield shipyard in India, Hanwha Ocean unveiled a floating data center model, and South Korea’s naphtha imports shifted from the UAE to Algeria as the Strait of Hormuz stayed constrained. On the risk side, AI data center operators are turning to captive insurance, and a revised privacy law raised the penalty ceiling Tving now faces.

This Week’s Events

New Production Sites and Modular Designs

HD Korea Shipbuilding & Offshore Engineering is advancing plans for a 2,050-acre greenfield shipyard in Tuticorin, India, which HD Hyundai is pushing as a core production base in Southwest Asia. In April 2026, HD KSOE signed a tripartite MOU with NSHIP-TN and the Sagarmala Finance Corporation Limited covering the shipyard’s development, financing, construction, and operation, and the Tamil Nadu state government is focusing on administrative support for HD Hyundai’s local settlement. Separately, Hanwha Ocean is debuting a 60MW floating data center (FDC) model at Gastech 2026, designed to address land-based constraints such as site scarcity and local civil complaints. The modular design allows power generation methods, server types, and capacity to be configured flexibly according to the installation site’s environment and customer requirements.

India released details of its Semicon 2.0 policy, which provides financial support across the entire value chain, including design, manufacturing equipment, front-end fabs, and back-end packaging. For R&D and human resource development, the government subsidizes up to 75% of combined capital and operating costs.

Baya Systems, a US-based semiconductor IP startup, has entered the Japanese market to provide fabric IP for data movement within AI chips. Its WeaverPro platform allows for system-level simulation, addressing the data movement bottlenecks in chiplet-based architectures; in Japan, the company sees business opportunities in automotive and robotics, among other fields.

Energy Logistics and Geopolitical Bottlenecks

Constraints in the Strait of Hormuz showed up on both the import and the export side this week. Algeria has replaced the United Arab Emirates (UAE) as South Korea’s primary naphtha supplier in the first half of 2026, accounting for 17.2% of imports, as the UAE’s share dropped from 23.3% in 2025 to 14.5% in H1 2026. The shift follows a fire at the UAE’s Ruwais refinery and transit bottlenecks in the Strait of Hormuz, where refined products have no bypass infrastructure. Unlike crude oil, which can bypass the Strait via the Abu Dhabi Crude Oil Pipeline, naphtha remains physically tethered to maritime transit.

Iraq is building land routes around the same chokepoint. Following a recovery in crude oil exports to 3 million barrels per day (bpd) in September 2026, the Iraqi government is accelerating the construction of land-based bypass pipelines to the Mediterranean. These projects, including the Basra-Haditha-Fishkhabur and Haditha-Baniyas lines, aim to reduce reliance on the Strait of Hormuz and support a long-term export target of 5 million bpd. Until the pipelines are running, however, the recovery still depends on the strait: it followed a request from the Iraqi government to Iran that resulted in certain tankers passing through.

Insurance, Penalties, and Governance

AI data center operators are turning to captive insurance subsidiaries because data centers are difficult to insure: there is currently no suitable product for high-value graphics processing units (GPUs), and even companies with business interruption insurance for power outages face a considerable waiting period before coverage begins. With approximately 6,000 captive insurers globally and USD 8 billion in savings achieved by 150 US-based captives over five years, captives let firms directly fill coverage gaps that insurers’ policies cannot cover and reinvest the funds.

In the digital services sector, Tving, a South Korean video streaming service owned by CJ ENM, faces potential penalties of up to 10% of total sales under South Korea’s revised Personal Information Protection Act following a data breach affecting 19.53 million unique users. This penalty ceiling, which could reach KRW 40.6 billion, is distinct from the civil damages arising from class-action litigation. The revised Personal Information Protection Act, taking effect on September 11, raises the penalty ceiling from 3% of total sales to a maximum of 10%. In the financial sector, KB Financial Group’s chairman candidate Lee Jae-keun said the larger the group, the more personnel matters should run on systems rather than on the chairman holding all power, aiming for a decentralized organization that runs on processes rather than on particular individuals.

Human Capital and Strategic Partnerships

Pulmuone Food & Culture was recognized as a 2026 Korea Job Creation Leading Company; CEO Lee Dong-hoon said the competitiveness of the food service industry starts with its frontline members. The company’s initiatives, including the establishment of Pulmuone Together—a subsidiary dedicated to disabled workers—and a 100% retention rate for maternity leave users between 2023 and 2025, were among the grounds for the award. GS25, a South Korean convenience store chain, is combining its Vietnamese store network with local fintech infrastructure and payment data. By partnering with VNPAY, a Vietnamese fintech company, to integrate QR code payments into its network of 453 stores, GS25 could use payment data from a cashback promotion to design marketing by age group and streamline inventory operations.

South Korea is also negotiating for at least a 15% equity stake and a board seat in Westinghouse as part of a USD 200 billion nuclear partnership. Academia and the nuclear industry view a board seat as the leverage needed to break free of constraints from long-standing intellectual property disputes and to seize the initiative in third-country markets such as Europe and Southeast Asia. The U.S., for its part, needs the construction and manufacturing capabilities of South Korea’s “Team Korea” consortium to handle surging power demand from AI data centers.

In Brief

ams OSRAM, the Austrian maker of LEDs and optical sensors, is steering its microLED technology toward interconnects inside AI data centers, because automotive LED lighting was not a large enough market to support the microLED business as a whole. The company has already sold its legacy lamp business to Japan’s Ushio and its Analog & Mixed Signal Sensor business to Infineon Technologies.

Company in Focus

Hanwha Group — The South Korean conglomerate that started in 1952 as Korea Explosives, a gunpowder maker in a country just out of war, and is now the 5th-largest chaebol by assets. It is currently the No. 16 defense company globally and one of South Korea’s “Big Three” shipbuilders.