Martial law has just been introduced in South Korea by President Yoon Suk Yeol. This historic decision comes after months of rumors and denials. The President justifies it by the accusation made against the opposition of “control the parliament, sympathize with North Korea and paralyze the government with anti-state activities”.
This situation creates a huge shockwave in the global technology sectorespecially for chaebols (South Korean conglomerates). Samsung and LG, pillars of the South Korean economy, find themselves in a delicate position due to their close ties to the government and their strategic importance to the country.
South Korea’s chaebols, deeply integrated into the fabric of government, will need to navigate an unstable political environment while maintaining operations. This situation could affect their decision-making processes and short-term investment strategies.
International concerns
Internationally, this political instability could therefore have repercussions on global supply chains, particularly in the semiconductor, display and electronic components sectors, where Samsung and LG are major players. Samsung Display, for example, is behind most premium smartphone screens, including the iPhone. Samsung is also a major player in semiconductors.
LG stands out in the TV industry as it provides the most advanced OLED panels in the industry. And that’s without mentioning the innovations brought to dozens of markets.
This situation therefore sets a worrying precedent. Their position as global economic players places them in a complex situation, in which they will have to balance their obligations to the South Korean government and their international responsibilities.
The establishment of martial law in South Korea increases uncertainties for the global technology sector. China and the United States have also made less than reassuring decisions. Among them, the limitation of American exports to China or the creation of a tax on imports of Chinese electric vehicles envisaged in the United States and Europe.
This new crisis also brings back questions about the autonomy of technology companies in the face of political powers and their role in moderating government actions around the world. The management of Samsung and LG will therefore be essential for the future of the industry. At least in the short term.
- South Korea imposes martial law
- Samsung and LG, tech giants with close ties to the government, face a period of instability
- Global electronic component supply chains could be affected
