As the era of artificial intelligence (AI) semiconductors arrives, South Korean corporations are making a mark in the neural processing unit (NPU) field, while concerns about the outflow of technology and talent to China are intensifying. With Chinese semiconductor companies actively trying to lure domestic NPU company engineers or extract core technologies, some corporations are responding by strengthening their security systems.
According to industry reports on the 6th, some domestic AI fabless and intellectual property (IP) corporations have initiated internal crackdowns to prevent technological leakage to Chinese corporations. China is not only the largest market for domestic semiconductor corporations but also a competitor. U.S. semiconductor sanctions against China have made it difficult to import advanced AI semiconductors.
Especially as imports of NVIDIA's cutting-edge graphics processing units (GPUs), which have become essential for AI data centers, have been blocked, there is a reliance on importing low-performance GPUs. Some local Chinese corporations are seeking breakthroughs by directly developing NPUs as substitutes for GPUs, but the industry consensus is that their performance and commercialization level remain inadequate.
In this context, South Korea, which is accelerating the development of AI chips using its own NPU technology, has become a target. A representative from the largest domestic AI fabless corporation noted, "Many South Korean NPU corporations have raised the level of AI chip development to replace GPUs and are working to enhance yield and performance through collaboration with foundry corporations. This is progressing faster than all but a few companies, such as those in the U.S. and Israel."
China has previously shown interest in South Korean technology, purchasing design assets related to NPUs from domestic IP firms. In September of last year, a Chinese AI semiconductor development corporation signed a $5 million (approximately 730 million won) license agreement regarding NPUs with Chips&Media, one of the leading domestic IP corporations. Earlier, Openedges Technology also entered into a licensing agreement with a Chinese company.
The reason China covets South Korea's NPU technology is that there is an increasing outlook that NPUs will be embedded in various devices, including AI semiconductors for training in data centers. According to market research firm IDC, it is projected that 50% of IT devices sold in the Chinese market by 2026 will be equipped with AI engines, including NPUs. Currently, NPU technology is led by South Korea, the U.S., and Israel, with South Korean corporations evaluated as having the fastest development speed among them.
Domestic NPU corporations currently have no sharp solutions other than strengthening security levels and tightening internal bonds. While the government has put various legal frameworks in place to prevent the outflow of technology and talent regarding memory semiconductors, concerns have been raised that NPU technologies at the startup or mid-sized corporation level are falling into a legal gray area. There are growing calls to actively protect such technologies through legislation or regulations.
Meanwhile, as incidents of domestic memory semiconductor technology leaking to China have come to light, industry awareness is increasing. A former Samsung Electronics Director General is being tried for allegedly leaking 18-nanometer DRAM process information to Chinese Changxin Memory (CXMT) in 2016, and a bill to increase the upper limit on fines for national core technology leaks, including semiconductors, has been passed in the National Assembly.