Korea's chemical industry is a giant industry, ranking fifth globally with sales reaching USD 115 billion and accounting for about 3.0% of the global market. The production capacity of ethylene, a basic petrochemical material, is used as a measure of a country's chemical industry, and Korea is the world's fourth biggest producer, producing 12.7 million tons (about 6.2%) of the world's total ethylene production of 250 million tons in 2021.

Backed by the upstream industry ensuring a stable and sufficient supply of high-quality raw materials, Korea's fine chemical industry produces core and applied materials for various downstream industries (e.g., semiconductors, displays, automobiles, secondary batteries, and hydrogen) based on an industrial structure that is capital, knowledge, and technology-intensive.

The American Chemical Society (ACS) ranked the world's top 50 global chemical companies based on sales in 2021, and Korea boasted its world-class chemical industry with three Korean companies (Lotte Chemical, Hanwha Solutions and GS Caltex) on the list, as well as LG Chem at ninth place.

Chemical products are Korea’s third most exported item following semiconductors and automobiles. Korea's chemical product exports stood at USD 1.3 billion in the 1990s when the products were globally competitive. Since then, the amount has increased more than 40-fold to USD 55.1 billion in 2021.

In 2022, foreign direct investment (FDI) in the chemical materials sector amounted to approximately USD 7.9 billion, not only recovering the pre-COVID-19 pandemic level, but also reaching the highest level in the last five years and increasing significantly by more than five times year-on-year. Despite the growing uncertainties in the global economy triggered by the war in Ukraine and interest rate hikes, FDI in all three sub-sectors of the chemical materials sector (i.e., chemical engineering, metals and metal processing, and secondary battery manufacturing) grew evenly. In particular, more overseas companies specializing in materials, parts and equipment are investing in Korea to tap into the nation's supply chains of high-tech industries, such as semiconductors, electronics, automobiles, and secondary batteries, and are expected to contribute to the establishment of a stable value chain with companies requiring the high-tech products and facilitate exports.

Centered on the three major chemical clusters of Ulsan, Yeosu (Jeonnam), and Daesan (Chungnam), the Korean chemical industry has achieved the economies of scale necessary for developing the large-scale device industry. The industry also has achived a high degree of vertical integration from crude oil to high-tech materials and excellent production management capabilities, facilitating Korean chemical companies' expansion into newly emerging high-tech industries such as secondary batteries and hydrogen. However, the product portfolios of many Korean chemical companies are still composed of general-purpose products and sales are mostly focused on Korea and China. The nation's the level of technology is relatively inferior to those of major players such as the United States and Europe, but Korean companies are rapidly developing and securing original technologies for key materials, components, and equipment, while expanding their partnerships in forms such as joint ventures with foreign companies interested in investing in the Korean chemical industry.

Increasingly being used in high-tech industries such as eco-friendly vehicles, secondary batteries, and electrical and electronic devices, engineering plastics are at the center of a fierce global competition aimed at securing technology. Company T leading the global advanced materials market has expanded its manufacturing base in Korea, raising expectations that it will contribute to the formation of a stable value chain with Korean businesses needing engineering plastics and to the development of related technologies. Southeast Asia with its relatively-low investment costs competed with Korea to attract Company T's investment, but the company decided to invest in Korea after the Korean government offered various incentives in Korea and Japan.

Despite global economic uncertainties, Company S announced plans to invest KRW 9 trillion from 2023 to 2026 to produce chemicals such as ethylene and propylene and high-value-added plastics in Ulsan. According to the Ulsan city government, the massive investment is expected to create up to 17,000 jobs during the construction period and revitalize the local construction industry valued at more than KRW 3 trillion. The company plans to commercialize for the first time in the world a TC2C (Thermal Crude to Chemicals) facility, which converts low-value heavy oil products from existing refineries into raw materials used in steam crackers that produce petrochemical raw materials.