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.

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Gov't to import more than 2 million eggs, discount mackerel to stabilize prices

Joongang Ilbo | English | News | Jan. 9, 2026 | UndeterminedSupply Chain Issues

The Korean government announced plans to import 2.24 million fresh eggs from the United States to stabilize egg prices, which have surged due to an outbreak of a new, highly contagious strain of avian influenza (HPAI). This is the first egg import in two years, following a previous import of 1.12 million eggs in January 2024 prompted by a similar outbreak. Egg prices have remained elevated since December 2025, with a 30-egg carton selling for 7,041 won as of early January 2026, driven by 32 outbreaks at poultry farms and 22 among wild birds that have led to the culling of 4.32 million hens.

In addition to egg imports, the government plans to increase chicken supply by importing over 7 million fertilized eggs for broiler chicken production. To address rising mackerel prices, the government will subsidize discounts of up to 60 percent and diversify import sources beyond Norway, which has seen reduced catches and currency challenges pushing prices higher. Retail mackerel prices rose almost 29 percent year-on-year by December 2025.

The government also intends to introduce a plan to restructure livestock distribution following recent reforms in the agricultural distribution system. Authorities emphasized cross-ministerial cooperation to maintain long-term food price stability amid ongoing supply disruptions caused by avian influenza and market fluctuations.

'홈플러스 사태' 김병주…검찰, 구속영장 청구

Kim Byung-joo in the Homeplus Incident… Prosecution Requests Arrest Warrant

Hankyung | Local Language | News | Jan. 9, 2026 | Political Scandal or Corruption

Prosecutors investigating the "Homeplus incident" filed an arrest warrant request for MBK Partners Chairman Kim Byung-joo on January 7, nearly eight months after receiving the case from financial authorities. The Seoul Central District Prosecutors' Office also requested arrest warrants for four other individuals, including Homeplus CEO Kim Kwang-il and other MBK executives, citing charges of fraud and violations of the Capital Markets Act. Prosecutors cited the risk of evidence destruction and potential flight due to frequent overseas travel by the suspects.

The charges stem from allegations that MBK and Homeplus issued large-scale bonds despite anticipating a credit rating downgrade, then abruptly filed for corporate rehabilitation, causing losses to bond investors. Homeplus issued 82 billion won in electronic short-term bonds on February 25, 2026, but its credit rating dropped three days later, followed by a rehabilitation filing on March 4. Subsequent downgrades led to severe financial distress, including the suspension of operations at 10 Homeplus stores nationwide.

Prosecutors uncovered evidence that MBK executives were informed of Homeplus's operating losses and impending credit rating downgrade well before the rehabilitation filing. The investigation was fast-tracked from the Financial Supervisory Service in April 2025, with multiple search-and-seizure operations conducted at Homeplus, MBK headquarters, and Chairman Kim's residence. Chairman Kim has been under a travel ban during the investigation.

Following summons investigations of key executives completed in December 2025, prosecutors moved to request arrest warrants. MBK Partners responded by denying all charges, asserting that the prosecution misunderstood the intent and actions of the major shareholder in trying to revive Homeplus during its financial difficulties, and pledged to present a full defense in court.

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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