The United States is strengthening cooperation with South Korea, designating it as a key supply chain partner for high-bandwidth memory (HBM) and batteries, as Washington moves to reduce dependence on China.
The restructuring of supply chains around allied nations is accelerating in response to China's coercive trade practices, expanding the role and opportunities for Korean companies.
Supply Chain Realignment
The U.S. Department of Commerce is strengthening cooperation with South Korea, Japan, and Taiwan to diversify supply chains for products with high dependence on China. HBM is a core component for AI semiconductors with rapidly surging demand, while batteries are essential for the expanding electric vehicle market.
SK hynix (000660.KS) and Samsung SDI (006400.KS) are strengthening their global presence as a result. The Korean government is pursuing both export expansion and technological competitiveness enhancement through supply chain cooperation with the United States.
China's $70 Billion Countermove
China's government has launched large-scale support of up to approximately 100 trillion won ($70 billion) for semiconductor technology self-reliance. The move aims to accelerate domestic technology development and supply chain construction in response to U.S. semiconductor export restrictions.
China is expanding investment across all sectors including semiconductor design, manufacturing, equipment, and materials, with particular focus on developing advanced processes below 7 nanometers. Chinese companies such as SMIC have already succeeded in mass-producing 7-nanometer chips and are pursuing 5-nanometer process development.
China's technological competitiveness in the global semiconductor market is improving rapidly, requiring Korean companies to maintain their technological lead through continuous innovation and investment.
Samsung Foundry Counterattack
Samsung Electronics' foundry division is mounting a counteroffensive, securing major global customers including Tesla, Apple, and now AMD. AMD has decided to entrust Samsung with production of its next-generation GPUs, interpreted as a supply chain diversification strategy away from its TSMC-centric approach.
Samsung has recently secured competitiveness in 3-nanometer and 2-nanometer process technologies and is actively pursuing customer acquisition. The company has also won orders for Tesla's autonomous driving chips and some Apple chip production, strengthening its position in the foundry market.
Industry observers forecast that if Samsung's customer diversification succeeds, cracks will appear in TSMC's dominant structure, intensifying competition in the foundry market.
Kia Pivots to Hybrids
Kia has postponed the U.S. launch of its EV4 electric vehicle and shifted its strategy toward hybrid electric vehicles (HEVs). The decision reflects slowing growth in the U.S. EV market and rising consumer preference for hybrids.
Kia plans to delay the EV4 launch by more than six months from the original schedule while expanding its HEV lineup. While EV sales growth is slowing in the U.S. market, HEVs continue to post double-digit growth. Insufficient EV charging infrastructure and high vehicle prices are also cited as major reasons consumers are choosing hybrids.
Automakers are moving away from an EV-only approach to build diverse eco-friendly vehicle portfolios including HEVs and PHEVs.
Woori Financial Strengthens Capital
Woori Financial Group's Common Equity Tier 1 (CET1) ratio surged by 1 percentage point in one year, significantly improving its financial soundness. The CET1 ratio indicates a bank's core capital soundness, and Woori Financial raised the ratio through asset efficiency improvements and profitability enhancement.
Based on this improvement, Woori Financial is expanding investment in productive financing including corporate loans and project financing. The group is particularly strengthening support for national strategic industries such as semiconductors, batteries, and bio, as well as small and medium-sized enterprises.
Financial authorities are also encouraging banks to expand productive financing alongside improving soundness, and Woori Financial is being evaluated as a case that aligns with this policy direction.
Chinese AI Firms Face Technical Hurdles
Chinese AI companies are struggling with technical challenges despite massive capital investments. Chinese big tech firms including Baidu and Alibaba have invested trillions of won in AI development but face difficulties securing high-performance GPUs due to U.S. advanced semiconductor export restrictions.
Gaps also exist in algorithm and data processing technologies that determine AI model performance compared to American companies. Chinese AI firms are pursuing proprietary AI semiconductor development and alternative algorithm research, but technological completion and commercialization will take time.
Analysis suggests China's catch-up speed in global AI competition may be slower than expected.
