As China's drive for self-reliance in semiconductor technology advances faster than expected, warnings are emerging in the National Assembly and industry that Korea's semiconductor sector could face structural pressure within the next few years. While the spread of artificial intelligence (AI) has ushered in a boom for now, some analysts say the gap between the two countries could narrow sharply as early as 2027 if China's localization strategy accelerates.
At a research presentation by the Korea-China Parliamentary Friendship Association on the 20th, a report assessed the expansion speed of China's semiconductor ecosystem as "far more aggressive than expected." Jun Byung-seo, head of the China Economy and Finance Research Institute, who delivered the presentation, said, "U.S. sanctions have actually sped up China's development," and added, "China is mobilizing national capital and policy capacity to foster semiconductors as a strategic industry." On Huawei, he explained that it "is building a semiconductor aircraft carrier structure that weaves materials, design, AUK, and software into a single axis."
Chinese corporations are also accelerating their investment and development pace. YMTC, China's largest NAND flash maker, recently began building its third semiconductor plant in Wuhan, moving to expand capacity. While U.S. equipment sanctions make it difficult to secure cutting-edge lithography tools, YMTC is seeking to minimize production disruptions by introducing domestic equipment and expanding government subsidies. Memory semiconductor company ChangXin Memory Technologies (CXMT) has also completed development of fourth-generation high-bandwidth memory (HBM3) and provided samples to Huawei, with plans to begin mass production next year. The industry says the Chinese government's "Big Fund" has quickly narrowed CXMT's technology gap.
Domestic industry outlooks express similar concerns. In a recent survey by The Federation of Korean Industries of 100 corporations, respondents said China's industrial competitiveness already surpasses Korea's this year, and projected it would reach a level similar to the United States in five years. In some sectors such as steel, machinery, batteries, displays, and auto parts, China is already assessed to be ahead of Korea's competitiveness, while semiconductors and electrical and electronics have also narrowed to a slim gap. In particular, many responses in the 2030 outlook said China is likely to overtake Korea in all key industries, including semiconductors. In the semiconductor industry, there is also the assessment that "the HBM technology of Chinese memory companies could approach Korea's level within two to three years."
Experts point out that this catch-up is not just a technical issue but will affect the entire supply chain structure. With high dependence on Chinese raw materials and materials, there are concerns that disruptions in specific items or export restrictions could recur at any time if U.S.-China tensions continue. The outflow of domestic talent is also cited as a structural risk factor. Many engineers from Intel, Samsung Electronics, and SK hynix are positioned at Chinese memory companies, leading to analysis that the know-how Korea has accumulated over decades is being transferred to China.
Experts say it is time to move beyond a simple technology competition to a response at the level of a "national strategy." They warn that unless the government directly supports the semiconductor industry and manages supply chains, as in China, the United States, and Taiwan, Korea is likely to fall behind in global competition in the AI era. In the industry, there are also urgent calls to manage HBM at the level of strategic materials and use it as leverage in negotiations over GPU (graphics processing unit) allocation, to build a system that diversifies raw material supply chains away from dependence on China, and to establish industry-academia linkage programs to prevent the outflow of key talent.
Experts view the period from this year through 2027 as the "last golden time" for Korea's semiconductor industry. With AI driving a surge in memory demand, this window favors Korean corporations, but once China raises its self-sufficiency in technology above a certain threshold, Korea's export structure itself could be shaken. This is why calls are growing for an overhaul not only in technology but also in talent, supply chains, and government support systems. Jun said, "This is not merely a stage to manage China risk," and added, "Unless the government and corporations move together by defining semiconductors as a national security industry, we will not be able to lead the next cycle."