South Korea

Intelligence for Better Decision Making

Shifting Dynamics in South Korea’s Semiconductor Industry Amid Global Competition

Jan. 8, 2026 | Competitiveness

South Korea’s semiconductor industry demonstrates robust global leadership alongside evolving challenges, supported by strategic domestic and international policies.

**South Korea’s semiconductor sector relies on SK Hynix and Samsung Electronics, which together control 80 percent of the global high-bandwidth memory market.**
This hardware dominance supports a domestic full-stack AI environment built on advanced 5G networks, proprietary models such as Naver’s HyperCLOVA X, and extensive data streams from super apps like Kakao and Naver. The country also leads the world in industrial robot density, strengthening its capabilities in physical AI applications.

**However, the ecosystem faces internal challenges including a shrinking AI talent pool as skilled professionals migrate to US tech firms, leaving South Korea last among OECD countries in net AI talent inflow.**
Companies rely heavily on American AI platforms and foreign capital for data infrastructure, while stringent data regulations restrict training. Occasional power shortages also threaten operational stability in semiconductor fabs.

**Micron Technology is expanding its next-generation HBM4 capacity to 15,000 wafers per month by 2026—roughly 30 percent of its planned 55,000-wafer total—to meet demand from NVIDIA’s “Vera Rubin” AI accelerator.**
The company has already begun equipment investments, plans to boost output in the second quarter, and will launch HBM4 mass production in February. Micron, Samsung, and SK Hynix will coordinate supplies according to NVIDIA’s performance evaluations in the first half of the year. By year-end, an advanced packaging plant in Singapore and, in the second half of 2027, Micron’s Hiromisa plant in Japan will add further capacity.

**China’s semiconductor industry has closed the gap with South Korea, surpassing it in system chip design, infrastructure, and a network of over 3,500 fabless companies versus South Korea’s roughly 150.**
The Korea Institute for Industrial Economics and Trade reports that China outperforms South Korea in 19 out of 30 semiconductor-industry criteria—ranging from R&D to pricing and finished-product services—despite US sanctions. Huawei and Cambricon now produce advanced AI chips domestically, and China pursues leadership across robotics, electric vehicles, batteries, and self-driving cars under its “China Standards 2035” initiative, including the first national standard for EV solid-state batteries.

**The government and ruling party have designated semiconductors as a core growth engine in their 2026 economic strategy, advancing the Special Act on Strengthening and Supporting the Competitiveness of the Semiconductor Industry toward final approval.**
The act aims to position South Korea among the world’s top two semiconductor powers. The economic plan also targets growth in defense, biotechnology, and cultural exports, restructures petrochemicals and steel, advances AX and GX transitions, and promotes regional development through RE100 industrial complexes and gift certificate programs. Financial measures include macroeconomic interventions, long-term domestic stock investment via the National Growth Fund, and tax incentives to channel liquidity into high-growth and venture capital funds.

Autonomous Driving and Robotics Breakthroughs Unveiled at CES 2026

Jan. 8, 2026 | Technology & Innovation

Leading automotive and technology firms revealed groundbreaking robotic and autonomous driving innovations at CES 2026 in Las Vegas.

**On January 6, Chung Eui-sun, Chairman of Hyundai Motor Group, attended CES 2026 to explore cooperation opportunities with major technology companies.**
His visit, following an economic delegation tied to President Yoon Suk-yeol’s state visit to China, represents Hyundai’s effort to strengthen ties with leading tech firms and accelerate progress in robotics and autonomous driving.

**At Hyundai’s booth, Chung reviewed demonstrations of its next-generation robot platform Mobed, the humanoid robot Atlas, and the Ioniq 5 robotaxi.**
He met with executives from Boston Dynamics and Google DeepMind Robotics to discuss technology roadmaps and integration challenges. This initiative reflects Hyundai’s strategy to integrate advanced robotics into its future mobility solutions.

**Chung explored Qualcomm’s high-performance Dragonwing IQ10 processor, signaling Hyundai’s interest in diversifying its chip partnerships beyond NVIDIA and Google.**
He also tested LG Electronics’ AI cockpit and autonomous driving systems for potential use in Hyundai vehicles. At Samsung Electronics, he proposed joint robotics initiatives to President No Tae-moon.

**He concluded the day with NVIDIA CEO Jensen Huang, reaffirming an October agreement for Hyundai to acquire 50,000 Blackwell AI chips.**
Both leaders pledged to fast-track the development and deployment of Hyundai’s proprietary AI models, leveraging this AI infrastructure to enhance in-vehicle intelligence and autonomous capabilities.

**Meanwhile, NVIDIA launched Alpamayo, its first AI system specifically for self-driving cars.**
After the launch, Jensen Huang discussed the new platform with Mercedes-Benz Chairman Ola Källenius and Executive Chair Euisun Chung. Industry speculation suggests Hyundai may adopt Alpamayo to advance its autonomous driving efforts, as it currently trails competitors like Tesla in Level 2+ technology and aims to introduce similar systems in mass-market vehicles by the end of 2027.

**Mercedes-Benz became the first automaker to adopt Alpamayo, incorporating the AI-powered system in the upcoming CLA model debuting in the US in Q1 2026 before a broader rollout.**
Alpamayo’s open-source framework combines vision-language-action models for interpreting visual data, large reasoning modules for complex scenarios, simulation tools for rare or hazardous events, and open datasets for extensive training and validation.

**Addressing concerns about memory supply, Huang emphasized NVIDIA’s role as a leading user of HBM4 high-bandwidth memory technology and cited strong support from Samsung Electronics and SK hynix.**
He said NVIDIA’s demand will drive expanded production capacity, minimizing the risk of shortages and ensuring a steady supply for AI chip development.

Monitored Intelligence for South Korea - Jan. 8, 2026

News
Media
274

Government
Releases
6

City/State
Releases
24

Embassy
Releases
0

Foreign
Service
Advisories
0

Academic/
Think
Tank
1

Podcasts
0

Videos
0

Social
Media
0

Business
Releases
1

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S. Korea seeks progress in talks with China on maritime demarcation, steel structures

Yonhap | English | News | Jan. 8, 2026 | Geopolitical Conflict and Disputes

South Korea aims to advance discussions with China regarding unresolved maritime issues in the Yellow Sea, particularly the demarcation of sea boundaries and Beijing’s installation of steel structures in overlapping waters. This intention was expressed following a recent agreement to resume vice-ministerial talks on maritime delimitation within 2026, marking the first dialogue of this kind in seven years.

The two countries have historically differed on how to define the exclusive economic zone (EEZ) boundaries in the Yellow Sea. South Korea advocates for a median line demarcation, while China favors a proportional approach based on coastline length and population. The ongoing talks are intended to reinvigorate efforts toward resolving these disagreements and promoting peace and coexistence in the region.

Separately, tensions have risen due to China’s construction of steel towers in the Provisional Maritime Zone, where their EEZs overlap. Beijing claims these structures serve as fish farms and management facilities, but South Korea suspects they may be part of a strategic move toward future territorial claims, similar to China's activities in the South China Sea. While discussions on maritime boundaries and steel structures are conducted on separate tracks, working-level meetings addressing the steel structures have shown potential for some progress.

Gov't borrows 2nd-largest 164.5 trillion won in temporary loans from BOK in 2025: Data

Joongang Ilbo | English | News | Jan. 8, 2026 | UndeterminedFinancial System Problems

In 2025, the South Korean government borrowed a total of 164.5 trillion won ($113.65 billion) in temporary loans from the Bank of Korea (BOK) through its overdraft facility, marking the second-largest amount on record. This amount included 5 trillion won drawn in December and was slightly lower than the record 173 trillion won borrowed in 2024.

The borrowing was split between 88.6 trillion won in the first half of 2025, amid political turmoil after the martial law declaration in December 2024, and 75.9 trillion won in the second half. The government paid 158.09 billion won in interest on these temporary loans, which was the second-highest annual interest payment, following 209.28 billion won paid in 2024.

The overdraft facility enables the government to temporarily cover short-term mismatches between revenue and spending by borrowing funds from the central bank.

Labor ministry vows stern measures against Coupang over alleged violations

Yonhap | English | News | Jan. 8, 2026 | Regulatory Enforcement Actions

The South Korean Ministry of Employment and Labor announced on January 6, 2026, that it is taking stern measures against Coupang Inc., a U.S. e-commerce company, for alleged violations of workplace laws. This action follows the formation of a task force to investigate suspected breaches of labor and industrial accident laws, which emerged in the wake of a major data breach affecting 33.7 million users, roughly two-thirds of South Korea's population.

The investigation will focus on allegations that Coupang engaged in the illegal dispatch of workers and implemented programs targeting the dismissal of low-performance employees. Authorities are also probing claims that the company pressured the family of a deceased worker, reportedly linked to overwork, to sign a settlement preventing them from seeking industrial accident compensation.

Labor Minister Kim Young-hoon condemned the alleged concealment of industrial accidents and illegal worker dispatch as serious offenses that violate workers' fundamental rights. The ministry warned it would take firm action without tolerance if the accusations are substantiated. The ongoing probes include multiple cases related to the company, including investigations into workplace death and the company's response to the data breach.

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