Iran conflict highlights S. Korea's tech exposure in the Gulf

South Korean Deputy Prime Minister and Science Minister Bae Gyeong-hun (center) speaks with a UAE business executive during a Korea-UAE business roundtable in the UAE on Nov. 19, 2025. (Ministry of Science and ICT)

The US-Israeli strikes on Iran and the retaliatory attacks that have since hit Saudi Arabia, the UAE, Qatar, Kuwait and Bahrain are drawing attention to how much South Korea's biggest technology companies now have riding on the Gulf.

No direct damage to Korean operations has been reported so far. But the region accounts for a significant and growing share of business for Samsung Electronics, LG Electronics and Korea's leading chipmakers, spanning premium consumer electronics sales and, more recently, contracts tied to the Gulf's AI data center buildout.

Samsung holds 34 percent of the Middle Eastern smartphone market, more than double the share of its nearest competitor, according to third-quarter 2025 data from research firm Omdia. Sales of its Galaxy S25 Ultra grew 7 percent year-on-year in the region, driven by strong demand for premium devices among Gulf consumers. Samsung and LG also rank first and second in the region's TV and home appliance markets, one of the few places globally where Korean brands still lead decisively over Chinese rivals competing on price.

Samsung unveiled its Galaxy S26 series on Wednesday, three days before the strikes began. The preorder window for the new lineup, typically a critical early sales period, now overlaps with the most volatile security environment the Gulf has seen in years.

On the semiconductor side, the exposure runs through a newer but potentially larger channel. Samsung and SK hynix signed contracts in October 2025 to supply memory chips for the Stargate AI data center project in the UAE, one of the largest AI infrastructure efforts outside the United States. South Korea formalized its participation last November after a summit between President Lee Jae Myung and UAE President Mohamed bin Zayed Al Nahyan. Separately, a consortium of seven Korean AI firms signed a cooperation deal with Saudi Aramco's digital subsidiary on Feb. 1 to provide AI chips, software models and cloud infrastructure.

Whether any of these business lines will be materially affected remains an open question. A semiconductor industry official said the immediate impact was expected to be limited, but added that the industry was monitoring whether conditions shift into a prolonged phase. An appliance industry official said logistics could be rerouted around the Strait of Hormuz if needed, but that a sustained decline in regional consumer confidence would be harder to offset.

The conflict arrives as South Korea recorded its strongest-ever February export performance. Shipments reached $67.45 billion (about 97.8 trillion won) last month, up 29 percent year-on-year, with semiconductor exports surging 161 percent to $25.16 billion, the Ministry of Trade, Industry and Resources reported Sunday.