Korea needs a lighthouse in China’s tech wave

As we step into the third month of 2025, it may seem a bit early, but from an industry reporter’s perspective, it's worth considering what the defining keyword of Korea’s industrial landscape this year might be. Surprisingly, it’s not artificial intelligence, semiconductors, or batteries that dominate the headlines—it's our neighbor, China. Since the beginning of the year, Chinese advancements in high-tech fields have been repeatedly featured in the economic sections of Korean newspapers.

For those on the ground—executives and employees working in Korea’s industrial sectors—the threat from China feels far more severe than it appears from the outside. “At first, China used human wave tactics. Then came the ‘money wave.’ Now, it’s the ‘technology wave’ that’s taking the world by surprise,” remarked an executive from an electronics company I recently spoke with. His comment encapsulates the evolution of Chinese industry from the 1990s to 2025. Over time, Chinese companies have become increasingly tricky for Korean firms to compete with.

Looking at the moves of Chinese companies in early 2025, the term “technology wave”—a sea of tech used to overwhelm competitors—doesn’t seem like much of an exaggeration. The first signal came in January with the release of “DeepSeek,” a generative AI developed in Hangzhou. It was built with only 5.6% of the budget reportedly spent on ChatGPT in Silicon Valley, yet rivaled its capabilities. In the U.S., this sparked alarm, with some calling it a “Sputnik moment” in the AI race against a strategic adversary.

There are also signs that the “Chip War”—Washington’s semiconductor sanctions against Beijing over the past eight years since the first Trump administration—may be losing its grip. Huawei recently announced mass production of the “Ascend 910C,” an AI chip that performs on par with NVIDIA’s H100. Meanwhile, electric vehicle giant BYD unveiled its “Super e-Platform,” claiming it can fully charge an EV in just five minutes. Although neither has been independently verified outside China, these technologies could drastically reshape global tech trends if accurate.

In the face of this tidal wave, Korean companies have two options: either establish an unbridgeable lead in sectors where China still lags behind or defend core markets head-on. A prime example of the former is HD Hyundai Heavy Industries, which is boldly pursuing R&D to outfit container ships with small modular nuclear reactors (SMRs)—a radical move toward nuclear-powered shipping. Such imagination may be essential to fundamentally fend off late-coming Chinese shipbuilders.

As for the latter approach, LG Group’s LG AI Research Institute stands out. It recently unveiled Korea’s first reasoning-based AI, “EXAONE Deep,” which performed competitively against DeepSeek in challenges like the U.S. Math Olympiad. EXAONE Deep is set to be deployed across a wide range of industries. Building up such capabilities step-by-step could one day serve as a lighthouse, guiding Korea through the flood of Chinese technology.

However, what’s regrettable is that Korea’s response so far relies heavily on the “creative determination” of individual companies. A more unified, collaborative approach is needed in sectors like petrochemicals and steel, where the Chinese threat is already visible. Perhaps Korea should take a closer look at Japan’s Rapidus project, where eight major companies—including Toyota and Sony—have joined forces to revive their semiconductor industry.