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
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6

City/State
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24

Embassy
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0

Foreign
Service
Advisories
0

Academic/
Think
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1

Podcasts
0

Videos
0

Social
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0

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1

Erudite Risk takes an all risks approach to intelligence reporting. We categorize key intelligence into one of 40 different risk intelligence categories.

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국가데이터정책위, 작년 활동 주춤…데이터 정책 공백 우려

National Data Policy Committee's Activity Slowed Last Year… Concerns Over Data Policy Gap

ET News | Local Language | News | Jan. 8, 2026 | Privacy

The National Data Policy Committee, a government body under the Prime Minister designed to oversee data production, trade, and utilization, did not hold any meetings in 2025 despite having a budget of 164 million won. This marks a sharp decline from prior years when the committee met 19 times in 2022, 26 times in 2023, and 11 times in 2024. Established in September 2022 under the Data Industry Act, the committee is responsible for reviewing the Basic Plan for the Promotion of the Data Industry every three years.

Civilian members reported a lack of communication from the Ministry of Science and ICT since December 2024, with confusion over their appointment terms. The ministry stated that the suspension of the committee’s activities was due to overlapping roles with the newly launched Presidential Committee on National Artificial Intelligence Strategy (AI Strategy Committee), particularly its Data Subcommittee, which has assumed responsibility for data policy.

The future of the National Data Policy Committee awaits decisions linked to national AI and data governance planning by the AI Strategy Committee. The draft Republic of Korea Artificial Intelligence Action Plan proposes establishing data governance to unify fragmented data laws, with comprehensive legislative reforms expected after 2027. Concerns remain about a potential policy gap during the transition period, as the committee is expected to review the government’s Second Basic Plan for the Promotion of the Data Industry this year, while its traditional focus on data industry promotion risks being overshadowed by AI-related priorities.

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

Yonhap | English | News | Jan. 8, 2026 | UndeterminedFinancial System Problems

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

The government's borrowing was split between 88.6 trillion won in the first half of 2025, amid political turmoil following the martial law declaration in December 2024, and 75.9 trillion won in the second half. Interest payments to the BOK totaled 158.09 billion won in 2025, the second-highest annual amount after 209.28 billion won in 2024.

The overdraft facility allows the government to temporarily cover short-term mismatches between revenue and spending.

AI 기본법 시행 임박…“현장 경험 반영한 제도 설계 필요해”

AI Basic Act Implementation Imminent… Need for System Design Reflecting Field Experience

ET News | Local Language | News | Jan. 8, 2026 | Regulation

With the enforcement of the Artificial Intelligence (AI) Basic Act set for January 22, 2026, stakeholders from public, private, and academic sectors convened to review regulations on transparency and accountability. There was broad agreement on the need to strengthen social responsibility as AI technology spreads, alongside a call to clarify standards to ensure predictable system operation in practical settings.

On January 6, a roundtable organized by Democratic Party member Hwang Jeong-a and AI policy platform company Codit focused on rationalizing and improving these regulations. Hwang emphasized South Korea’s unique position as the first country to implement an AI Basic Act and highlighted the importance of integrating field experiences from technology development and service operation into policymaking. He also called for balanced discussions around standards for high-impact AI and generative AI labeling obligations.

Industry representatives stressed the importance of detailed enforcement decrees and guidelines for successful implementation. Lim Jeong-wook, co-CEO of Startup Alliance, noted ongoing uncertainties about the regulatory scope and standards. While recognizing the significance of the government’s regulatory deferment, he emphasized using this period to test and improve the system, also urging alignment with international trends like those in the EU.

Choi Seong-jin, of the Startup Growth Research Institute, highlighted potential misalignment between the Act’s transparency and accountability requirements and technological realities, particularly regarding labeling generative AI outputs. He warned that broad application of obligations could create confusion and called for more detailed criteria for regulating high-impact AI. Song Hae-young, director at Codit’s Global Policy Empirical Research Center, stated that establishing AI transparency and accountability standards requires a deep understanding of both technology development and business environments, underscoring the collaborative nature of standard-setting to build trust in AI deployment.

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