The influence of Nvidia, the world's largest artificial intelligence (AI) semiconductor company, is permeating the entire South Korean industrial ecosystem. There is a growing argument that while benefiting from the supercycle led by Nvidia, efforts to strengthen existing competitiveness must also continue.
According to industry sources on August 25, the semiconductor sector has reaped the most significant benefits from Nvidia's rapidly growing AI chip business. A prime example is high-bandwidth memory (HBM). The memory supercycle, which has propelled Samsung Electronics and SK Hynix to peak performance in terms of earnings and market capitalization, was triggered by the expansion of Nvidia-driven AI data centers.
The substrate business, which supports Nvidia's graphics processing units (GPUs), is also experiencing a positive trend. Major domestic printed circuit board (PCB) companies, including Samsung Electro-Mechanics and LG Innotek, have seen their performance and market capitalization surge over the past year, with increasing demand for next-generation substrates like FC-BGA that directly encase semiconductors.
Moreover, copper foil, once a material for secondary batteries, is strengthening its role as a semiconductor material due to Nvidia's advancements. Doosan's Electronics BG division is leveraging its position as the top domestic producer of copper-clad laminates (CCL) to drive the group's second growth phase.
Competition is also fierce in the glass substrate sector, an alternative to PCBs, as companies vie for Nvidia's approval. SKC has initiated a 400 billion won capital increase for its subsidiary, Absolix, to commercialize glass substrates, while Samsung Electro-Mechanics and LG Innotek are committed to early commercialization of glass substrates.
Nvidia's influence extends to cooling and power network sectors as well. Samsung Electronics is leveraging its acquisition of Germany's Flakt Group to secure domestic and international customers for its HVAC business, while LG Electronics is embarking on large-scale bidding based on a liquid cooling system that integrates chillers, cooling water distribution units (CDUs), and cold plates.
The power infrastructure sector is no exception. Companies like Hyosung Heavy Industries, which specializes in high-voltage transformers, and LS Cable & System and LS Electric, which focus on wires and distribution, are securing contracts for AI data centers overseas, including in the United States.
However, experts caution that excessive reliance on Nvidia could weaken negotiation power, necessitating the establishment of alternative supply chains. In fact, one domestic semiconductor company has expressed concerns about technological dependency and diminished negotiation power, as it can only exchange design and process information with Nvidia through a closed network.
Professor Yang Jun-seok of Catholic University stated, "Currently, the boom in key South Korean industries like semiconductors is led by American companies such as Nvidia, and the independent actions of South Korean firms are not clearly visible. In fields like robotics (physical AI), there is a need for South Korean companies to create a proactive collaboration framework to secure industrial leadership based on their accumulated competitiveness."
* This article has been translated by AI.
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