hankyoreh

Based on presentation at KIET’s Dec. 16 forum on Korean strategy toward China. Official report to be published in 2026. The background image was created using the generative AI Gemini.

A new assessment suggests that China has caught up with South Korea not only in terms of competitiveness in robotics and autonomous driving, but is giving Korea a run for its money in its biggest moneymaking industry: semiconductors. 

While Korea remains firmly in the lead in the memory chip field, China is boosting its edge in design and production infrastructure of system semiconductors — most notably AI chips, which are fast becoming a key focus in the competition for global hegemony. 
 
Experts are pointing to the urgent need for Korea to overhaul is approach to cooperation with China in consideration of the changing industrial environment, a move they say goes hand-in-hand with the push to restore Seoul-Beijing ties by President Lee Jae Myung, who is currently in China for a state visit. 

A report by the state-funded Korea Institute for Industrial Economics and Trade (KIET) on the competitiveness between South Korea and China regarding key industries in the “Made in China 2025” plan obtained by the Hankyoreh on Thursday indicated that South Korea is lagging in the three major fields in manufacturing: automotives (including EVs, batteries and self-driving vehicles), robotics and semiconductors. The evaluation was based on interviews and surveys with experts conducted in September 2025.
 
KIET took three fields of industry, including semiconductors, of the 10 key sectors listed in the Chinese government’s “Made in China 2025” initiative announced in 2015, and compared China and Korea’s progress in terms of competitiveness by value chains, technology, price and quality. The fact that a government think tank calculated relative competitiveness by breaking down various aspects of specific industries comes with heavy implications.
 
The results of such analyses highlight how the overall competitiveness of China’s semiconductor industry is on par with that of Korea. 

Out of the eight criteria used to assess the semiconductor sector’s value chain, China surpassed South Korea in four: R&D, production of finished products, product service and domestic demand.
 
Korea outshone China when it came to overseas demand and criteria regarding supply chains, such as securing materials, parts and equipment. Considering the fact that US sanctions placed hefty restrictions on China’s procurement of key equipment and export of domestic chips, the reality is that Korea has no unique advantages.
 
China had the upper hand in 19 of the 30 criteria (63.3%) for specific sectors in the semiconductor industry, such as technology, pricing and infrastructure, as China has the overwhelming upper hand in cost-effectiveness and infrastructure, even while it may lag in manufacturing memory chips and foundry technology.
 
“Many large AI models have been competing in a race to the top, and breakthroughs have been achieved in the research and development of our own chips,” Chinese President Xi Jinping noted in his 2026 New Year’s address on Wednesday. “All this has turned China into one of the economies with the fastest growing innovation capabilities.”
 
China was considered to be better overall when it came to technology, pricing and infrastructure in the chip designing sector, which includes AI chips. Chinese companies such as Huawei and Cambricon Technologies no longer have to rely on other companies for AI chips, meaning that Korea now finds itself buying advanced semiconductors from China.  
 
“China’s goal is to make semiconductors for domestic use, not for export purposes. There are over 3,500 fabless manufacturing companies within China, while Korea barely has 150. In comparison, China definitely has more independence and potential,” commented Rhee Woo-geun, a former professor at Tsinghua University’s School of Integrated Circuits who currently teaches at Sungkyunkwan University’s College of Information and Communication Engineering.

When it comes to general competitiveness (in terms of value chain) in robotics, EVs, batteries, and self-driving cars, China has already surpassed Korea, having the upper hand in all stages: R&D, supply chains, production and service, and market demand.
 
On a seven-point scale, where any number above 4 indicates that China is in the lead, while any number below demonstrates Korean competitiveness, the institute ranked self-driving cars at 5.3, robots and EVs at 5.0 each, and batteries at 4.8, putting China in the lead.
 
The criterion for in-depth assessment by sector also shows the rapid progress China is making. When it came to self-driving cars, China eclipsed Korea in development and design, procurement of materials and parts, production of finished products, and after-sales service.
 
Korea trailed behind China in AI, software and high-definition maps, all key to self-driving cars. The same can be said for robots with AI. Korea is struggling when it comes to all sectors related to robotics, excluding product development and design.
 
“China and Korea are on equal footing when it comes to the technical aspect of robotics, but China surpasses Korea in terms of infrastructure and pricing while leaving Korea in the dust in respect to self-driving technology,” said Cho Eun-kyo, the head researcher of KIET’s team on China, who was the primary author of the report. 

“It is time to conduct an accurate assessment of the situation and consider how we can work strategically with China, a manufacturing powerhouse, to use its technology ecosystem and its advanced technology market,” she said. 
 
Issues may arise with the fact that, now that the tables have turned, the gap in competitiveness in advanced technology may grow wider. The Chinese government has already crossed off 90% of its goals for its “Made in China 2025” plan, and is ramping up speed with a spiritual successor, the “China Standards 2035” plan, to expedite the growth of and government support for eight emerging industries and nine future industries.
 
On Dec. 30, 2025, China became the first country in the world to introduce a national standard for EV solid-state batteries, kickstarting fully-fledged efforts to develop technologies for commercialization. Solid-state batteries offer higher energy density than existing lithium-ion batteries and are safer, which awards them the status of being the “dream” battery. However, no company in any country, including Korea, has successfully commercialized solid-state batteries, meaning that no global standards exist.
 
“The reality is that we don’t have a satisfying answer as to how China caught up with us so much quicker than we thought,” commented Baek Seo-in, a professor at Hanyang University’s School of Global Culture and Commerce.

“We should focus on maintaining the gap in the technology Korea has the lead in, target sectors that are particularly sensitive to security issues regarding Chinese products, and draft a mid-to-long-term plan while utilizing China in a more strategic method,” he suggested
 
By Park Jong-o, staff reporter

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