Won rally clouds earnings outlook for automakers, chipmakers

By Jun Ji-hye

• Published Sep 8, 2026 4:10 PM KST

Sharp appreciation to weigh on exporters from 4th quarter: analysts

A sharp rise in the Korean won’s value against the dollar is clouding the earnings outlook for the nation’s major exporters, including automakers and chipmakers, according to market analysts Tuesday.

In broad terms, a stronger local currency offers welcome relief to the broader economy by easing inflationary pressures and lowering import costs. The main concern, however, is the speed of the change.

A rapid rise in the won can lead to unexpected earnings losses for export-dependent companies as they have limited time to adjust product prices or production plans in response to foreign exchange swings. On top of that, they may have to reverse the benefits of a weaker won that were previously factored into their earnings forecasts.

The recent decline in the exchange rate, driven by a stronger won, has been unusually steep. Data released Monday by the Bank of Korea showed that the won-dollar exchange rate fell 8.09 percent in July alone, marking the sixth-largest monthly decline since the market average exchange rate system was introduced in March 1990.

It was the sharpest one-month drop in nearly 17 years, following the 9.81 percent decline recorded in March 2009 during the global financial crisis. With the exchange rate falling another 3.89 percent in August, the cumulative decline over the two months reached 11.67 percent.

After hovering near the 1,600 won level just months ago, the exchange rate fell from 1,549.4 won at the end of June to 1,424 won at the end of July, before dropping further to 1,368.6 won at the end of August. The downward trend has continued this month, with the exchange rate briefly falling into the 1,330 won range during intraday trading Monday. On Tuesday, the won weakened by 5.1 won against the dollar to close at 1,345.6 won per dollar, remaining in the 1,340 won range for a second straight trading day.

Lower exchange rates can support domestic purchasing power and price stability by reducing the cost of imported crude oil and key raw materials. Cost-intensive industries that rely heavily on imported commodities, such as airlines, chemical producers and food processors, stand to benefit from lower input costs.

The trouble arises, however, when the won’s appreciation outpaces what export-oriented industries can absorb.

For major exporters, a weaker dollar directly reduces revenues and profit margins when their foreign-currency earnings are converted into won. This dynamic poses an especially serious threat to major players in the automotive and semiconductor industries, where overseas sales account for a large share of total revenue.

As a result, automotive giants Hyundai Motor and Kia are bracing for a noticeable financial hit from the stronger won.

“Reduced export profitability will begin hurting domestic automakers’ financial statements in earnest from the fourth quarter,” Yuanta Securities analyst Kim Yong-min said.

He noted that the won’s weakness boosted operating profits by about 3.7 trillion won for Hyundai Motor and 4.3 trillion won for Kia between the first quarter of 2023 and the second quarter of 2026. However, that tailwind could eventually reverse as the won strengthens.

The chip sector is similarly exposed. In a recent research note, Nomura Securities highlighted that while Korean memory chipmakers generate revenue in U.S. dollars, a significant portion of their operating expenses — around 20 percent of sales — is incurred in won.

“Consequently, a 10 percent appreciation of the won reduces operating profit by approximately 12 percent,” the report said.

Citing intensifying currency headwinds, Citigroup recently cut its target prices for major chipmakers Samsung Electronics and SK hynix to 430,000 won and 3 million won, respectively.

Citigroup also cut its third-quarter operating profit forecasts for Samsung Electronics and SK hynix by 10 percent and 3 percent, respectively.