Bilateral trade between Malaysia and South Korea is projected to exceed US$40 billion in 2026, driven by expanding economic cooperation, rising investments and the conclusion of negotiations for a bilateral Free Trade Agreement (FTA).
Outgoing South Korean Ambassador to Malaysia Yeo Seung-bae said South Korea has climbed from Malaysia’s ninth-largest trading partner to seventh, with bilateral trade growing from approximately US$20 billion to nearly US$30 billion over the past five years.
On that note, he expects trade to surpass US$40 billion this year, with the FTA potentially propelling South Korea into Malaysia’s top five trading partners once it comes into force.
“Once our FTA enters into force, Korea will become one of Malaysia’s top five trading partners,” he said.
Yeo highlighted growing South Korean investments in Malaysia, particularly in high-value manufacturing and technology.
Major developments include Samsung SDI’s battery manufacturing expansion, Simmtech’s semiconductor operations and the commencement of local vehicle assembly by Hyundai.
South Korean companies are also exploring opportunities across the upstream and downstream rare earth industries in Perak and Pahang, potentially strengthening Malaysia’s position in critical mineral supply chains.
Beyond trade and investment, Yeo said bilateral cooperation has expanded into defence and technology following the elevation of Malaysia-South Korea relations to a strategic partnership in November 2024.
The two countries signed a defence industry cooperation memorandum of understanding in 2025, paving the way for closer industrial and technological collaboration.
The first two South Korean FA-50 fighter jets are expected to arrive in Malaysia this month, with deliveries of all 18 aircraft to Kuantan Air Base scheduled for completion by 2028.
Yeo also expressed hope that South Korea would participate in Malaysia’s Multi-Role Support Ship project, which could create further opportunities in shipbuilding and bilateral supply chains.
The ambassador, who has served in Malaysia since October 2022, said the expansion in trade, investment and defence cooperation reflected the strengthening of bilateral ties over the past four years.
