South Korea's business sentiment improved for the fourth quarter of 2026, driven by robust exports in the semiconductor and cosmetics sectors, according to a survey released on Sunday, 27 September 2026. The findings point to a cautiously brightening manufacturing outlook even as cost pressures weigh on profitability targets.

Key Survey Findings

The Business Survey Index (BSI) for 2,413 manufacturing companies nationwide reached 86 for the October–December 2026 period, up 6 points from the previous quarter, according to the Korea Chamber of Commerce and Industry (KCCI). A BSI reading below 100 indicates that pessimists outnumber optimists, while a figure above that benchmark signals the reverse.

The semiconductor sector's BSI posted 139 for the fourth quarter — the highest reading since the survey began — and has now remained above the 100 benchmark for four consecutive quarters. The cosmetics sector surged 20 points to 120, while the medical and precision equipment sector gained 28 points to reach 108.

Profitability Concerns Persist

Despite the improving sentiment, 60.4 percent of surveyed companies expected their operating profits for the year to fall short of targets set at the beginning of 2026. Higher production costs — driven by elevated raw material and energy prices — were cited as the primary reason. This underscores a recurring tension in South Korean manufacturing: strong export volumes do not always translate into bottom-line health, particularly when input costs remain sticky.

Semiconductor Technology Leaks: A Parallel Threat

Separately, South Korea's spy agency has detected more than 100 cases of industrial technology leaks overseas over the past five years, with semiconductors accounting for nearly 40 percent of the total, according to official data.

Data submitted by the Ministry of Trade, Industry and Resources to the National Assembly showed the National Intelligence Service (NIS) detected 107 cases of overseas industrial technology leaks between 2021 and 2025. Semiconductor technologies accounted for the largest share with 40 cases, followed by display technologies with 21 cases, and electrical and electronics technologies with 10 cases. Seven cases involved automotive technologies, while six involved shipbuilding technologies.

Of the 107 cases, 31 involved national core technologies — assets the government designates as critical to national security and the economy. Semiconductors again led, with nine such cases, followed by displays and electrical and electronics technologies with five cases each.

The Samsung-ChangXin Case

One high-profile incident involved a former Samsung Electronics manager who allegedly leaked the company's 18-nanometer DRAM manufacturing technology — a national core technology — to Chinese chipmaker ChangXin Memory Technologies. The case illustrates the geopolitical stakes attached to South Korea's semiconductor dominance and the growing sophistication of industrial espionage targeting the sector.

What This Means Going Forward

South Korea's semiconductor and cosmetics exports are providing a tangible lift to manufacturing confidence, but the twin challenges of margin compression and technology security risks cloud the longer-term picture. The NIS data and the KCCI survey together suggest that sustaining export leadership will require not only demand-side momentum but also tighter safeguards around proprietary technologies that rivals are actively seeking to acquire.