china surges ahead: south korea's semiconductor lead evaporates in two years

2025-02-24 general

Seoul, Monday, 24 February 2025.
a new report reveals a stunning reversal in the semiconductor industry. south korea, once a dominant force, has fallen behind china in key technologies. the korea institute of science and technology evaluation and planning found that china now leads in high-integration, low-resistance memory chips with a score of 94.1 against south korea’s 90.9. just two years ago, korean experts believed they were ahead. this shift raises concerns about south korea’s future in the global semiconductor market, threatened by rising competition and geopolitical pressures.

key findings of the kistep report

The korea institute of science and technology evaluation and planning (kistep) survey involved 39 domestic experts [1][2][6]. The survey assessed technological capabilities, setting the most advanced nation at 100% [1][6]. South korea’s high-integration, low-resistance memory chip technology scored 90.9%, trailing china’s 94.1% [1][2][6]. In high-performance, low-power AI chips, south korea scored 84.1%, also behind china’s 88.3% [1][2][6]. China also leads in power semiconductors and next-generation high-performance sensing technology [1][2]. South korea only maintains a lead in high-integration, low-resistance memory chips and advanced packaging from a commercial perspective [1][2].

expert opinions and market impact

Experts who participated in a 2022 survey held a different view [1][2][6]. They previously considered south korea ahead in key areas like high-integration, low-resistance memory chips, advanced packaging, and next-generation high-performance sensing [1][2][6]. The turnaround in just two years highlights china’s rapid progress [1][4]. The report also suggests that while south korea leads in manufacturing processes and mass production, it lags in basic technology and design [2][3][6]. This shift has significant implications for investors, potentially impacting the stock values of major south korean semiconductor companies [8].

factors influencing south korea’s decline

Several factors contribute to south korea’s declining position. These include the rise of japan and china, us sanctions, and growth in southeast asian markets [1][2][3]. A potential second trump administration and insufficient domestic research and development investment add further uncertainty [3][9]. The report identifies critical factors influencing south korea’s future semiconductor technology levels as core talent drain, ai semiconductor technology development, us-china tensions, domestic policies, and supply chain localization [3][9]. The loss of core talent is particularly concerning [3][9].

south korea’s response and future strategies

The south korean government is responding by investing ₩26 trillion (approximately $19.5 billion usd) to support its semiconductor industry [7] [alert! ‘calculation needed based on current exchange rates, none provided in source’]. The report emphasizes the need to secure advanced semiconductor manufacturing technology, expand the ecosystem in system semiconductors, cultivate core talent, and prevent existing talent from leaving [3][9]. Experts believe that improving work environments and retaining high-end talent are crucial for technological breakthroughs and industrial upgrades [3][9].

china’s advancements and global implications

China’s rapid advancements are exemplified by Yangtze memory technologies (ymtc) successfully mass-producing 294-layer nand flash products [3]. China achieved this technological leap from 128 layers to 294 layers in approximately three years and five months [3]. This contrasts with samsung electronics, which took around four years and seven months to advance from 128 layers to 286 layers 14 = 14 months longer [3]. This achievement signifies china’s substantial breakthrough in memory technology [3]. These advancements, coupled with potential trade sanctions, pose considerable challenges for south korean companies [3].

Bronnen

semiconductor technology china korea