An analysis has emerged suggesting that China is leading South Korea in the semiconductor industry, excluding the memory sector. The report claims that China has surpassed South Korea not only in traditional manufacturing but also by enhancing its competitiveness across advanced manufacturing sectors such as robotics, electric vehicles, and batteries.
According to the report titled “Analysis of the Competitive Edge and Policy Directions for Advanced Industries in Korea and China,” released by the Korea Institute for Industrial Economics and Trade on the 24th, aside from the memory semiconductor field, China has widened the gap significantly in advanced manufacturing sectors compared to South Korea.
The institute noted that in the semiconductor sector, which is a major export item for South Korea, China holds an advantage over South Korea in non-memory areas like AI chip design and semiconductor design platforms, except for memory.
Moreover, the report added that in emerging industries of the future, such as robotics and autonomous vehicles, China is progressing rapidly with both technology development and commercialization, thereby getting ahead of South Korea.
Specifically, in industrial robots, although South Korea slightly leads in R&D capabilities like product development and design, China has the upper hand in parts procurement, mass production, and creating overseas markets. In the realm of electric vehicles, while South Korean companies maintain competitiveness in service areas like maintenance and the ability to create overseas markets, they are generally lagging behind China in autonomous driving.
The report emphasized that South Korea should establish an independent “K-Manufacturing Model” suitable for the AI era by leveraging its qualities of quality, reliability, and accumulated technological prowess. It also highlighted the need for South Korea to pursue strategies that lead global supply chains based on trust.
Furthermore, the report pointed out the necessity of rapidly building an advanced manufacturing ecosystem by creating new demand markets, developing new business models, and products considering the competition with China in the global market.
Cho Eun-kyo, Head of the China Industry Analysis Team at the Korea Institute for Industrial Economics and Trade, stated that the industrial competition between Korea and China has entered a structural competition stage that includes not just technological pursuit but also industrial ecosystems, supply chains, and markets. She noted that South Korea must pivot its industrial strategy towards securing ultra-gap technologies and strategically leveraging China’s industrial ecosystem to accumulate new manufacturing competitiveness.