South Korea

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South Korea Seeks Equal Tariff Relief Amid New US Semiconductor Measures
Jan. 19, 2026 | Geopolitics & Defense

South Korea is engaging with the United States over newly announced semiconductor tariffs, seeking to protect its leading memory chip industry and secure treatment comparable to Taiwan’s.

**Trade Minister Yeo Han-koo assessed that the first tranche of US semiconductor tariffs, unveiled on January 14, 2026, will have limited direct impact on Korean firms.**
The initial 25 percent levy targets advanced AI chips from Nvidia and AMD but explicitly excludes memory chips, the primary export of Samsung Electronics and SK hynix. President Trump’s proclamation likewise focuses on Nvidia AI semiconductors imported from Taiwan and re-exported to China and other markets, although South Korean high-bandwidth memory embedded in those products faces scrutiny despite the tariff’s stated scope.

**At the January 16 groundbreaking of Micron’s New York facility, US Commerce Secretary Howard Rutnik warned that major memory chip producers must build US manufacturing capacity or face tariff increases up to 100 percent.**
He stated that companies will either pay full tariffs on imported memory semiconductors or shift production stateside. While he did not name specific firms, industry observers interpret this message as targeting South Korean and Taiwanese leaders in global semiconductor output.

**Last month the United States and Taiwan finalized a trade agreement granting Taiwanese chipmakers structured exemptions designed to encourage foreign direct investment in US fabs.**
During plant construction, imports up to 2.5 times new capacity enter tariff-free, and after startup up to 1.5 times capacity remains exempt. South Korea secured a “no less favorable treatment” commitment in the Korea–US Joint Fact Sheet but has yet to finalize equivalent tariff relief, using Taiwan’s terms as the benchmark for its negotiations.

**On January 18 the Blue House announced plans to consult with Washington under the “no less favorable treatment” principle, aiming to align Korean outcomes with those granted to Taiwan.**
Policy chief Kim Yong-beom is coordinating with relevant ministries to develop countermeasures, drawing on prior assurances that South Korea’s semiconductor industry would not face stricter treatment than other economies. At the same time, Seoul is monitoring US reviews of critical mineral imports tied to broader supply-chain diversification goals and maintaining continuous high-level dialogue to clarify the timing and scope of any second phase of tariffs.
South Korea Advances Dokpamo AI Project With New Consortium Call and Revised Evaluation Criteria
Jan. 19, 2026 | Technology & Innovation

South Korea’s Ministry of Science and ICT has set the stage for the next phase of its Dokpamo AI foundation model project by announcing first-stage results and opening a call for an additional consortium.

**On January 15, 2026, the ministry released the first-stage evaluation for Dokpamo, the national initiative to develop an independent AI foundation model.**
LG AI Research, SK Telecom, and Upstage advanced to the second stage. Because only three teams moved forward instead of the planned four, the ministry invited all original applicants—eliminated teams and new entrants alike—to compete for the remaining slot.

**The evaluation combined benchmark testing, expert assessments, and real-user evaluations to measure model performance, cost efficiency, usability, and ecosystem impact.**
LG AI Research led every category and earned the top composite score of 90.2 points, receiving the highest marks from both experts and end users.

**Naver Cloud, initially ranked among the top four, fell foul of the ministry’s originality rules.**
Its foundation model relied on a non-updatable external encoder tied to a Chinese AI system, violating the requirement that teams develop models from fully initialized and optimized weights. As a result, the ministry disqualified Naver Cloud’s entry as an independent model.

The consortium chosen through the second-chance recruitment will receive the same support as the other advancing teams, including GPU access, data resources, and designation as a “K-AI company.” Naver Cloud and NC AI both confirmed they will not reapply, while other original applicants and companies such as Kakao and KT are reportedly considering participation in the new call.

**For the second-stage evaluation, the ministry refined its criteria to emphasize objective performance, technical capability, and practical industrial usability.**
While maintaining the three core pillars—benchmark testing, expert review, and user evaluation—it increased the weight on efficiency and usability over sheer model size. The revised framework also addresses past concerns about technological originality and open-source usage, incorporating feedback from academia, industry, and domain experts.

**Vice Minister Ryu Je-myung said the ministry has evolved project criteria and evaluation procedures in consultation with participating teams.**
He pointed to ongoing adjustments in benchmarking methods, evaluation items, and scoring rules to ensure clarity and flexibility, keep pace with rapid global AI developments, and avoid the issues encountered in the initial phase.

**SK Telecom’s consortium tied with LG AI Research for first place in Phase 1 with its A.X K1 foundation model, which features over 519 billion parameters.**
The team plans to expand its training data, add multimodal capabilities—starting with document image recognition and summarization—and integrate voice and video processing in the second half of 2026. Supported languages will include Korean, English, Chinese, Japanese, and Spanish.

**Development of A.X K1 involves eight core partners—SKT, Krafton, 42dot, Rebellion, Liner, Selectstar, Seoul National University, and KAIST—alongside new collaborations with KAIST’s AI Graduate School and SNU’s Department of Mathematical Sciences.**
SK Group affiliates such as SK Hynix, SK Innovation, SK AX, and SK Broadband, as well as roughly 20 other institutions including the Korea Higher Education Foundation and the Choi Jong-hyun Academy, will adopt and deploy the model.

**NC AI, eliminated in the first-stage evaluation, confirmed it will not participate in the revival round.**
The company said it will focus on its existing base model and consortium partnerships to advance industry-specific AI and physical AI technologies, contributing to developments in the nation’s industrial sector.

Monitored Intelligence for South Korea - Jan. 19, 2026


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태양광 업계 "銀 시세 급등 열받네"...원가 29%가 은값

Solar Industry Frustrated by Soaring Silver Prices...29% of Costs Are Silver Price

ZD Net Korea | Local Language | News | Jan. 19, 2026 | Supply Chain Issues

Silver prices have surged to over $93 per ounce, marking a more than 300% increase in the past year. This spike has significantly impacted the solar industry, as silver, though used in small quantities in solar panels, now accounts for up to 29% of manufacturing costs, up from 3.4% in 2023 and 14% last year. The rising cost of silver is adding to the financial strain on solar panel manufacturers, many of whom have operated at a loss due to oversupply issues since the early 2010s.

To manage increasing costs, the solar industry is raising panel prices and actively seeking cheaper substitutes for silver. In the Chinese solar market, manufacturers recently increased module prices by 1.4–3.8%, with a 500W panel now estimated to cost about 400 yuan. Analysts predict that continued raw material price increases will likely lead to higher solar module prices. Efforts to decrease silver usage have resulted in a reduction from 11.2 mg per watt in 2024 to 8.96 mg per watt in 2025, with expectations that silver consumption in the solar industry will drop by 800–1,000 tons compared to the prior year.

Some manufacturers, such as Longi Green Energy Technology, JinkoSolar, and Shanghai Aiko Solar Energy, are already experimenting with non-silver substitutes. However, the industry cautions that unverified substitutes could compromise panel performance and warranty reliability, potentially exposing manufacturers to significant compensation liabilities. The solar sector now represents about 17% of total silver demand, more than double its share a decade ago, according to the Silver Institute.

환율 다시 1480원 눈앞…'약발 안 먹히는' 환율 정책, 실물경제 경고등

Exchange rate nearing 1480 won again… Exchange rate policy 'losing its effect,' warning signs for the real economy

Newsis | Local Language | News | Jan. 19, 2026 | UndeterminedEconomic Growth

The won-dollar exchange rate is once again nearing the 1,480 won level despite government interventions, signaling diminishing effectiveness of current exchange rate policies. Since late last year, authorities have implemented various stabilization measures such as dollar sales from reserves, loosening financial regulations, strengthening market monitoring, and providing tax incentives to ease foreign currency demand. However, these efforts have not halted the upward trend of the exchange rate, which has rebounded after temporary declines following interventions.

Sustained high exchange rates pose significant risks to the real economy, including increased import costs that lead to higher consumer prices and rising operational expenses for companies heavily reliant on foreign currency payments. This situation is expected to strain ordinary households through increased costs for imports, overseas travel, education, and remittances. Economists suggest the ideal exchange rate to support economic stability lies around 1,300 won, far below current levels.

The government maintains that it is too early to evaluate the full impact of its measures, noting some initiatives are ongoing or phased and emphasizing a cautious, gradual approach. Officials also indicated potential use of macroprudential tools, such as stricter controls on foreign currency transactions by financial institutions, if instability persists. Experts, however, highlight the need for structural reforms that boost growth potential and industrial competitiveness to restore market confidence and achieve sustainable exchange rate stability. Without these medium- to long-term reforms, the won may remain vulnerable to future fluctuations.

President Lee's Warm Hospitality Visits Contrast With Moon's Diplomatic Cold Shoulder

Chosun Ilbo | English | News | Jan. 19, 2026 | UndeterminedPolitics and Elections

President Lee Jae-myung's recent visits to Japan and China at the start of 2026 have received warm welcomes, underscoring South Korea's increasing geopolitical importance. His engagements included striking drums with Japanese Prime Minister Takaichi and taking a selfie with Chinese President Xi Jinping at the Great Hall of the People, signaling strengthened diplomatic ties. These visits contrast sharply with those of former President Moon Jae-in, whose travels to China and Japan were marked by cold diplomatic receptions and limited engagement.

During his state visit to China from January 4th to 7th, President Lee was treated with high-level hospitality, including dining with Xi Jinping and Premier Li Qiang, and meeting Zhao Leji, Chairman of the National People’s Congress. This stands in contrast to former President Moon’s visit nine years ago amid the THAAD conflict, which was marred by protocol issues, assaults on journalists, and a low-level official delegation. Moon’s visit was perceived as “humiliating diplomacy” due to these challenges and China's minimal showing of respect.

President Lee’s visit to Japan is also being compared to Moon’s brief 10-hour trip in May 2018. While Moon’s visit was mainly limited to attending a trilateral summit and included no additional engagements, Lee’s visit in 2026 was met with more substantial diplomatic and public interactions. Moon’s reluctance to deepen engagement with Japan, partly due to ongoing tensions following a Supreme Court ruling on forced labor compensation, contrasts with Lee’s proactive diplomacy.

Former Chinese Premier Li Keqiang’s extended visit to Japan in May 2018 is also highlighted as a point of comparison, emphasizing the deeper level of engagement with Japan seen in China’s approach compared to Moon’s brief visit. President Lee’s recent visits are viewed as part of a strategic effort to strengthen South Korea’s position amidst Sino-Japanese tensions, receiving what is described as “strategic hospitality” from both countries.

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