South Korea

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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

News
Media
324

Government
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35

City/State
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55

Embassy
Releases
3

Foreign
Service
Advisories
0

Academic/
Think
Tank
24

Podcasts
0

Videos
0

Social
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0

Business
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7

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FTC slaps fines on 3 construction firms, CJ for unfair trading

Joongang Ilbo | English | News | Jan. 2, 2026 | Regulatory Enforcement Actions

The Fair Trade Commission (FTC) imposed fines totaling 93.5 billion won ($64.8 million) on three construction firms—Daebang Construction, JungHeung Construction, and Woomi—as well as CJ Group for illegal inter-subsidiary transactions and unfair insider trading related to public land development projects. The FTC also referred the companies to the prosecution following its investigation.

Daebang Construction was fined for improperly supporting affiliated companies owned by the chairman's family by transferring ownership of public housing sites with expected high development returns. JungHeung Construction was sanctioned for providing free guarantees worth trillions of won to a company owned by a family member of the chairman.

CJ Group faced penalties for illegally injecting funds into a troubled affiliate through derivatives. Woomi, a midsized real estate developer, was fined for funneling large-scale construction projects to its affiliates, including a company owned by the chairman's family member.

김병수 로보티즈 대표 "피지컬 AI 이후 로봇 시장, 비교 불가할 만큼 커진다"

Kim Byung-soo, CEO of Robotis, says the robot market will grow incomparably larger after Physical AI

ZD Net Korea | Local Language | News | Jan. 2, 2026 | UndeterminedTech Development/Adoption

Kim Byung-soo, CEO of Robotis, highlighted that the robotics market has undergone a fundamental shift with the advent of Physical Artificial Intelligence (AI). He explained that before Physical AI, robot companies were mainly akin to factory automation firms with limited market scope. After Physical AI, the potential market size has expanded dramatically, encompassing most sectors where humans perform labor, marking a move into an entirely new dimension for the industry.

Robotis achieved profitability in the first quarter of the current year, with annual sales growing over 20%. The company is making substantial investments, particularly increasing capital expenditures overseas, although revenue growth is still catching up with incoming orders due to the hardware nature of its business. Kim noted that traditional robots operated based on rigid mathematical models, limiting their functionality and adaptability, especially in dynamic environments. Physical AI is set to change this by enabling robots to perform a broader range of human tasks.

Regarding humanoid robots, Kim emphasized their potential to address the full spectrum of labor markets, including automobiles, digital devices, and real estate. Robotis focuses on both hardware, especially actuators, and software, along with supplying critical data to big tech companies developing robot foundation models. A key technical challenge is developing robot hands with more than 20 degrees of freedom, significantly more complex than the current six degrees, to replicate human hand functionality.

Robotis chose Uzbekistan for its overseas production base due to its existing machinery industry and government support, enabling rapid scaling of robot joint and actuator production. On the geopolitical front, Kim identified China as a rising concern but also sees opportunities through closer ties with the United States. Robotis aims to fill a role in hardware supply chains that exclude China by collaborating with American companies.

Finance chief pledges economic stability as ministry set to be divided

Yonhap | English | News | Jan. 2, 2026 | UndeterminedEconomic Growth

Finance Minister Koo Yun-cheol pledged continued support for local businesses and the public’s livelihoods amid the impending division of South Korea’s finance ministry. Beginning January 1, 2026, the ministry will be split into the Ministry of Finance and a newly created Ministry of Planning and Budget, the latter of which will handle government budget planning under the Prime Minister's Office as part of a government reorganization.

Koo emphasized his commitment, as deputy prime minister for economic affairs, to managing the macroeconomy and revitalizing livelihoods. He highlighted efforts to promote growth among small and medium-sized enterprises and self-employed individuals, while addressing economic polarization by supporting vulnerable populations.

Lee Hye-hoon, a former three-term conservative lawmaker and veteran economist, has been nominated to lead the new Ministry of Planning and Budget.

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