South Korea

Intelligence for Better Decision Making

South Korea Advances National AI Strategy Amid Industry Push and Civil Society Concerns
Jan. 2, 2026 | Technology & Innovation

South Korea’s national AI initiatives are reshaping industry standards, regulatory approaches and public engagement.

**People’s Solidarity for Participatory Democracy (PSPD) criticized South Korea’s draft National AI Action Plan for prioritizing AI industry promotion over fundamental rights like human dignity and self-determination of personal information.**
PSPD noted that the plan exempts public consent requirements and relaxes regulations for industrial convenience, echoing past policies that elevated economic growth above citizens’ rights. It identified six high-risk areas—information rights, health care and welfare, economy, defense, climate and society—and warned that equating state and corporate interests with individual rights undermines constitutionally guaranteed protections. PSPD also highlighted the plan’s insufficient 20-day public consultation period and called for extended, meaningful engagement with civil society and directly affected individuals.

**The AI Framework Act, set to take effect in January 2026, mirrors this industry-first approach by favoring minimal, flexible regulation to spur AI innovation without banning unethical practices or addressing domains where AI could threaten human safety and rights.**
Subordinate statutes under the act continue to prioritize industrial development over robust safeguards and disregard repeated civil society appeals for stronger protections. Analysts argue that without substantial amendments to both the Framework Act and the National AI Action Plan, South Korea risks perpetuating a regulatory environment that fails to constrain corporate AI deployments and leaves individuals vulnerable to algorithmic harms.

**In his 2026 New Year’s address, Deputy Prime Minister and Minister of Science and ICT Bae Kyung-hoon cast AI as the linchpin of national competitiveness.**
He outlined plans to build an “AI basic society” benefitting all citizens, secure an independent world-class AI model and accelerate AI transformation across sectors including manufacturing, shipbuilding and logistics. Bae emphasized integrating semiconductors and AI into a “full-stack K-AI” ecosystem for global market entry and pledged an institutional framework to prioritize corporate security and wage an “all-out war against hacking.”

**Ministers collectively declared 2026 a pivotal year for innovation, naming AI among five priority sectors alongside bio, cultural content, defense and energy.**
Prime Minister Kim Min-seok stressed industrial structure innovation and fair benefit distribution, while Deputy Prime Minister and Minister of Economy and Finance Koo Yoon-chul framed AI transformation as key to securing physical AI leadership and regional hub status. Trade, Industry and Energy Minister Kim Jeong-gwan aimed to link regional development with AI-enhanced trade through a manufacturing AI (M.AX) strategy, and Climate, Energy and Environment Minister Kim Seong-hwan outlined regulatory reforms to support a renewable-nuclear energy mix. Financial Services Commission Chairman Lee Eok-won introduced a finance strategy to underpin AI-driven economic growth via inclusive, innovation-focused financial support.

**On the industry front, major technology firms are scaling up infrastructure and services to align with these ambitions.**
Naver has begun phase 2 construction at its Gak Sejong data center—phase 3 is slated for completion by 2029—and plans to launch AI agent services such as a shopping assistant and conversational search (AI Tab) next year before integrating them into an all-in-one agent, Agent N, by 2027. Kakao is acquiring 2,424 NVIDIA B200 accelerators for its Ansan data center, dedicating 16% of government-allocated GPUs to generative AI model training, and advancing its open-source Kanana2 language model toward a mixture-of-experts architecture. Kakao Tools, the company’s AI agent linked to ChatGPT, will integrate with platforms including maps, gifting, music streaming, finance and mobility, and it plans a second Namyangju data center by 2029.

**At CES 2026, LG Electronics showcased the humanoid home robot “LG Cloyd,” featuring advanced five-finger dexterity for household tasks, and reorganized its robotics efforts under the Home Appliance Business Division to accelerate commercialization.**
Samsung Electronics emphasized a hyper-connected AI ecosystem via its SmartThings platform, demonstrating seamless integration across appliances such as the Gemini AI-powered Bespoke refrigerator without deploying standalone robotic hubs. This divergence reflects a broader market shift toward comprehensive ecosystems and data-centric optimization in the AI home sector.

**SK Group chairman Choi Tae-won told employees that the company’s previous investments in memory, ICT, energy solutions and batteries have set the stage for the emerging AI era.**
SK plans to reinforce its AI semiconductor capabilities and deliver “AI integrated solutions” by harnessing competencies across its energy, telecommunications, construction and bio affiliates. Choi described AI-driven innovation as the foundation for future growth and pledged support for creative challenges and development throughout 2026.

**HD Hyundai Heavy Industries launched its Future of Shipyard (FOS) initiative to digitize and AI-enable shipbuilding in three stages.**
The first “visible shipyard” phase now offers real-time process and equipment monitoring; the second stage links process data with AI for predictive decision-making; and the third phase, targeting 2030, aims to establish an autonomous shipyard with a 30% productivity increase and a 30% reduction in construction time. AI applications already optimize steel plate cutting, automate design calculations and speed owner requirement processing, while pilots of “physical AI” robotics for welding and assembly and digital twin simulations are underway. Simultaneously, HD Hyundai pursues a diversified decarbonization strategy with ammonia- and methanol-powered vessels, electric propulsion demonstrations and preparatory work on hydrogen solutions and small modular reactors.

**A Zoom-commissioned report found that 92% of South Korean AI-native companies regard AI as a critical competitive advantage, the highest rate in the Asia-Pacific.**
These firms anticipate that federated AI architectures combining multiple models will drive greater accuracy and cost efficiency in 2026. They expect agentic AI to automate routine tasks, shifting workforce focus toward creative strategy and human interaction. In marketing, widespread AI-generated content will heighten the importance of brand authenticity, ethical decision-making and balancing privacy with personalization. The report also predicts a shift from AI adoption to the establishment of effective AI governance frameworks under the upcoming AI Basic Law, effective January 2026, which aims to codify transparent, responsible AI system management.
Samsung DRAM Technology Leak Triggers Legal Action and Exposes Global Industry Risks
Jan. 2, 2026 | Technology & Innovation

Unauthorized transfer of DRAM process technology has prompted legal action and exposed critical vulnerabilities in the global semiconductor industry.

**The Seoul Central District Prosecutors’ Office indicted 10 individuals—five former Samsung Electronics employees and five associates of ChangXin Memory Technologies (CXMT)—for violating trade secret and unfair competition laws.**
Investigators allege that beginning in September 2016, a former Samsung department head and other ex-employees obtained Samsung’s classified 18-nanometer DRAM process technology through a contact now at CXMT. They copied hundreds of process steps by hand, established shell companies, relocated offices frequently and used coded language to evade detection.

**From 2018 to early 2023, CXMT’s second development team, led by another former Samsung executive, refined the stolen DRAM process to suit Chinese manufacturing conditions.**
In 2020, CXMT technicians also acquired DRAM process technology from SK hynix via subcontractor channels. Leveraging these illicit acquisitions, CXMT became the first Chinese—and fourth global—company to mass-produce 10-nanometer-class DRAM in 2023. Samsung Electronics attributes a revenue decline of about 5 trillion won in 2024 directly to this technology leak.

**Semiconductors account for 20.8 percent of South Korea’s exports, and prosecutors estimate the national economic damage at tens of trillions of won.**
They opened the investigation in January 2024 after related probes uncovered multiple technology leaks through both domestic and overseas channels, confirming threats to the nation’s semiconductor sector and technological security.

**Founded in 2016 with support from government entities and design firms, CXMT recruited its initial development team—including the former Samsung department head now indicted—and received proprietary DRAM process steps through this network.**
The current legal actions aim to address the breach of state-designated core technology and prevent further unauthorized dissemination of critical semiconductor know-how.

Monitored Intelligence for South Korea - Jan. 2, 2026


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Top general calls for readiness in event of enemy provocations

Yonhap | English | News | Jan. 2, 2026 | Geopolitical Conflict and Disputes

Joint Chiefs of Staff Chairman Gen. Jin Yong-sung urged South Korean troops to remain ready to respond promptly and according to established principles in the event of enemy provocations. He made these remarks during the military’s first situation assessment meeting of 2026 and in video talks with units stationed in remote areas, including a general outpost near the North Korean border and a Marine unit on Yeonpyeong Island, the site of a deadly North Korean shelling in 2010.

Gen. Jin was also briefed by commanders of overseas contingents and emphasized the importance of maintaining operational readiness while ensuring the safety of deployed personnel. Currently, 1,005 South Korean troops are deployed in 13 overseas regions, mainly engaged in United Nations peacekeeping and multinational security missions, with key units stationed in Lebanon, South Sudan, and waters off Somalia for anti-piracy operations.

“가전제품 사면 보조금 줄게”…돈 쏟아부은 중국, 제조업 일단 반등

If you buy home appliances, we'll give you a subsidy… China pours in money, manufacturing sees initial rebound

Maekyung | Local Language | News | Jan. 2, 2026 | UndeterminedEconomic Growth

China's manufacturing sector entered expansion territory in December 2025, with the official Purchasing Managers’ Index (PMI) rising to 50.1, surpassing market expectations and ending eight months of contraction. Both manufacturing and non-manufacturing sectors showed growth, with the composite PMI reaching 50.7, the first simultaneous expansion in manufacturing and services in 2025. Private-sector data also confirmed this positive momentum, indicating broad improvement across manufacturing, including small and medium-sized enterprises.

Despite these encouraging signs, some analysts caution that the rebound may be influenced by temporary factors such as year-end fiscal spending and policy effects, making it premature to declare a structural economic recovery. Indicators like investment, consumption, and industrial production remain weak. Price trends are mixed: the Consumer Price Index rose by 0.7% year-on-year driven by increasing food prices, marking a shift from previous deflation, while the Producer Price Index continued to decline, indicating persistent deflationary pressures on producers.

The Chinese government plans to sustain its growth-supporting policies in 2026, including subsidies for home appliance, electronics, and electric vehicle purchases. Initial funding of 62.5 billion yuan in special treasury bonds has been announced to support these efforts, following a record 300 billion yuan in subsidies in 2025. Additional fiscal measures include value-added tax exemptions on certain property sales and electricity price reductions in major industrial provinces like Jiangsu and Guangdong to reduce costs for businesses. Further subsidy allocations will depend on evolving economic conditions throughout the year.

VIETNAM ENACTS FIRST LAW ON ARTIFICIAL INTELLIGENCE: KEY PROVISIONS AND LEGAL IMPLICATIONS

Bae, Kim & Lee LLC | English | AcademicThink | Jan. 2, 2026 | Regulation

On 10 December 2025, Vietnam's National Assembly enacted the Law on Artificial Intelligence, effective from 1 March 2026. This legislation is the first in Vietnam to specifically regulate AI-related activities and applies to domestic and foreign entities involved in AI systems within Vietnam, excluding those related solely to national defense, security, or cryptography.

The law defines key terms such as AI, AI Systems, Developers, Providers, and Deployers, and establishes a risk-based classification system for AI applications: high risk, medium risk, and low risk. High-risk AI systems pose significant harm to individuals, organizations, national interests, or security. Medium-risk systems may mislead or manipulate users, while low-risk systems do not fall into the other categories.

Transparency obligations require Providers and Deployers to label AI-generated content and inform the public when content may be misleading or replicates real events or individuals. Specific guidelines for labeling and notification will be issued by the Vietnamese government.

High-risk AI systems must undergo conformity assessments before deployment, with some requiring third-party certification by recognized bodies. Foreign Providers of high-risk systems must maintain a legal contact in Vietnam and establish a commercial presence if certification is mandatory. Medium-risk AI systems must adhere to transparency and accountability requirements, and low-risk systems face minimal regulatory burdens but must provide accountability upon request by authorities.

Liability provisions place responsibility for damages caused by high-risk AI systems on the Deployer, who may seek reimbursement from Providers, Developers, or other parties. Liability may be exempted under certain conditions, including intentional fault by the injured party or force majeure. Third parties causing damage via illegal interference are also liable, with joint liability possible if the Deployer or Provider is negligent.

The law provides transitional periods for existing AI systems to comply: 18 months for systems in healthcare, education, and finance, and 12 months for others. During this time, AI systems may continue operating unless suspended by authorities due to significant risk of harm.

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