The rapid restructuring of South Korea's manufacturing production and supply chains is being driven by the spread of artificial intelligence (AI), U.S.-China tensions, and increased protectionism. The semiconductor sector is shifting towards an AI-centric supply chain, while the automotive industry is adapting to changes in eco-friendly vehicles and global production bases.
On July 27, the Bank of Korea released an updated report titled 'Mapping Major Manufacturing Production and Supply Chains in South Korea.'
Since the first report was published in 2023, the Bank of Korea has noted significant changes in the global industrial environment due to the spread of AI, the growth of Chinese manufacturing, heightened protectionism, and expanded eco-friendly regulations, leading to a rapid restructuring of domestic manufacturing production and trade structures.
In particular, the semiconductor industry is experiencing a shift towards an AI-focused global supply chain, driven by increased investments in data centers and AI infrastructure following the rise of generative AI. Demand is moving from traditional CPUs and general-purpose DRAM to GPUs and high-bandwidth memory (HBM), solidifying the AI semiconductor supply chain involving U.S. company NVIDIA, Taiwan's TSMC, and South Korea's Samsung Electronics and SK Hynix.
As a result, the structure of semiconductor exports has also changed. Taiwan, which accounted for 9.0% of semiconductor exports in 2022, is projected to rise to 19.9% by 2025, becoming the second-largest exporter after China. Meanwhile, while China maintains its status as the largest exporter, both the export value and share have decreased.
With the expansion of semiconductor production, imports of materials, components, and equipment have also increased. Notably, reliance on the Netherlands' ASML, a key supplier of EUV lithography equipment essential for advanced semiconductor production, has grown, making the Netherlands South Korea's largest source of semiconductor manufacturing equipment imports. The country also shows high dependence on semiconductor materials and components from China, Japan, and the U.S.
The automotive industry is also undergoing a supply chain transformation centered on eco-friendly vehicles. China now accounts for 33.8% of global automobile production, establishing itself as the world's largest electric vehicle producer. In South Korea's automotive import market, the share of Chinese vehicles has surged from 3.5% in 2022 to 37.2% in 2025. Approximately 70% of imported electric vehicles are from China, and all electric buses are sourced from there.
Conversely, due to the U.S.'s increased protectionism and policies promoting local production, the share of South Korean electric vehicle exports to the U.S. has plummeted from 33.6% in 2022 to 5.2% in 2025. In response, domestic companies are expanding hybrid vehicle production and increasing local manufacturing bases in the U.S.
Jung Sung-yeop, head of the Bank of Korea's Regional Research Support Team, stated, "Manufacturing competitiveness must consider production locations, global supply chains, and inter-country connections. We hope this report serves as a reference for developing policies and corporate strategies to adapt to changes in manufacturing and supply chains in the AI era."
* This article has been translated by AI.
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