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. 9, 2026

News
Media
278

Government
Releases
16

City/State
Releases
28

Embassy
Releases
0

Foreign
Service
Advisories
0

Academic/
Think
Tank
3

Podcasts
0

Videos
0

Social
Media
0

Business
Releases
0

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

The goal is to provide intelligence that allows decision makers to avoid being blindsided by what they may have missed, while informing them to make better decisions as well.

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Erudite Risk also includes operations categories so you can monitor the environment for better decision making. Everything is tied together--what happens in risk affects operations and what happens in the market impacts risk profiles.

We categorize key intelligence into one of 30 different operations intelligence categories.

Different roles and functions within the organization can monitor different key issue areas. HR may monitor employment, wages, regulations, labor and management relations, etc., while P&L leaders may monitor overall developing trends.

Operations Categories Reported on Today

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이재명 ”5000 코스피"…한은·금융위, 스테이블코인·STO 규제 마련 올스톱

Lee Jae-myung 5000 KOSPI… Bank of Korea and Financial Services Commission Completely Halt Stablecoin and STO Regulation Preparation

ZD Net Korea | Local Language | News | Jan. 9, 2026 | Regulation

The KOSPI index recently reached 4,600 and showed an upward trend, leading to delays in legislation related to stablecoins. Questions have arisen about the Lee Jae-myung administration's ability to provide alternative investment options beyond stocks, especially with its pledge to reach a KOSPI index of 5,000. Authorities appear to be aiming to prevent investment flows away from stocks as the index rises.

Regulatory preparations for token securities (STOs) and stablecoins have been postponed. Financial Services Commission chairman Lee Eok-won initially intended to amend the Capital Markets Act to address STOs but has made little progress despite market milestones. The Bank of Korea and the Financial Services Commission created a "Digital Assets Act Key Issues Coordination Plan" for stablecoins, covering issuer requirements, agency cooperation, capital requirements, governance of virtual asset exchanges, and liability for incidents like exchange hacks.

Disagreements between the Bank of Korea and the Financial Services Commission persist, particularly regarding issuer conditions and a coordinating agency body, preventing consensus. The unresolved issues were brought before the National Assembly's Political Affairs Committee despite ongoing discussions. While both institutions deny political motives, some speculate the ruling party prioritizes stock market revival over stablecoin regulation ahead of local elections. The Bank of Korea stated it agreed to submit the coordination plan to the National Assembly but expressed surprise at the current version, indicating communication gaps with the Financial Services Commission.

Industry Ministry backs Yongin for world's largest chip cluster, snubs relocation push

Joongang Ilbo | English | News | Jan. 9, 2026 | UndeterminedBizdev-Partnering

The Ministry of Trade, Industry and Resources has affirmed that the world's largest semiconductor cluster project will proceed in Yongin, Gyeonggi, despite political calls to reconsider its location due to electricity supply concerns. The ministry stated that most agreements for utilities like electricity and industrial water are already in place and that while long-term power plans beyond 2039 are still being finalized, early-phase requirements are secured to keep the project on schedule.

The Yongin chip cluster, led by Samsung Electronics and SK hynix, spans 11.44 million square meters with investment pledges of 360 trillion won and 600 trillion won respectively. The cluster is expected to play a key role in South Korea’s semiconductor supply chain. Climate Minister Kim Sung-whan raised concerns that the 15 gigawatts of power needed—equivalent to about 15 nuclear reactors—may be difficult to supply to Yongin, suggesting a possible relocation to southern energy-rich regions. This proposal aligns with President Lee Jae Myung’s strategy to develop a “southern semiconductor belt” to drive regional growth and leverage renewable energy.

However, the relocation debate has faced opposition from industry leaders and lawmakers who argue that the existing cluster’s proximity to established supply chains, skilled labor pools, and infrastructure in Yongin is critical. They also note challenges in rural areas such as talent shortages and lack of supplier ecosystems. Former Samsung president and People Power Party lawmaker Koh Dong-jin called the proposed relocation "absurd," emphasizing that the project is a national strategic initiative already under construction.

Power supply for the Yongin cluster remains a significant challenge. Samsung is estimated to need 9.2 gigawatts, with Korea Electric Power Corporation (Kepco) committed to supplying 2.7 gigawatts and liquefied natural gas generators providing another 3 gigawatts. The remaining power will depend on new transmission lines and generation projects, some delayed due to local resistance. SK hynix’s 5.5 gigawatt demand is partly fulfilled with ongoing grid construction and promised capacity, though long-term delivery depends on overcoming similar transmission issues.

Construction has begun on SK hynix’s factories with operations targeted for next year, while Samsung is moving slower but has started land acquisition for its planned semiconductor fabs scheduled for mass production by 2030. The cluster will eventually host more than 80 related organizations, including materials, parts, equipment firms, and research institutions. Industry insiders consider relocating the project outside Gyeonggi highly unlikely given the existing concentration of resources and government backing.

삼성SDS, 엔비디아·오픈AI 협력 빛 본다…"올 1분기 성과"

Samsung SDS Shines Through Collaboration with Nvidia and OpenAI Results in Q1 Performance This Year

ZD Net Korea | Local Language | News | Jan. 9, 2026 | UndeterminedOperating Results

Samsung SDS is rapidly expanding its "AI agent" service business in 2026, with AI infrastructure services based on various cloud platforms and NVIDIA B300 GPUs set to launch next month. The company has introduced hundreds of NVIDIA's B300 units and plans to complete preparations to offer AI infrastructure services globally, utilizing its Samsung Cloud Platform alongside AWS, Microsoft Azure, Google Cloud Platform, and Oracle Cloud Infrastructure.

In collaboration with OpenAI, Samsung SDS signed the first domestic reseller partner contract for "ChatGPT Enterprise" at the end of 2025. This partnership enables Samsung SDS to provide enterprise generative AI services, with substantial customer interest and expected tangible results as early as January 2026 or within the first quarter.

On the AI solutions front, Samsung SDS’s procurement and supply chain management SaaS, supplied last year to leading server and PC customers, is nearing service deployment after final testing. The company anticipates new contracts this quarter with additional industrial customers in the electrical and air conditioning sectors.

Separately, Samsung SDS is part of a consortium with Naver Cloud and regional governments building a national AI computing center in Haenam, Jeonnam. Construction is slated for the second half of 2026, aiming to secure 15,000 advanced GPUs by 2028 and open in 2029, further strengthening South Korea’s AI capabilities.

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