DistantNews
Support us
🇰🇷 South Korea /Technology

AI Reshapes Global Manufacturing: Taiwan's Share in Korean Semiconductor Exports Surges

From Hankyoreh · () Korean

Translated from Korean, summarized and contextualized by DistantNews.

At a glance

News Official statement Context piece
  • Artificial intelligence is reshaping global manufacturing supply chains, with significant shifts observed in the semiconductor sector, according to the Bank of Korea.
  • South Korea's semiconductor exports to Taiwan have surged, indicating a move from competition to interdependence between the two nations in this field.
  • The AI boom, particularly the demand for AI infrastructure like data centers, is driving the growth of specialized chips such as GPUs and HBM, creating a new global supply chain involving key players like Nvidia, TSMC, Samsung, and SK Hynix.

Artificial intelligence is fundamentally altering the global manufacturing landscape, with the semiconductor industry experiencing particularly dramatic changes. A notable shift observed by the Bank of Korea is the significant increase in Taiwan's share of South Korea's semiconductor exports, suggesting a transition from a competitive relationship to one of interdependence.

The global production network reorganization and the expansion of AI-centered demand have brought about significant changes in Korea's semiconductor export structure by country, with a particularly noticeable increase in exports to Taiwan.

— Bank of KoreaExplaining the shift in South Korea's semiconductor export destinations.

According to the Bank of Korea's revised 'Manufacturing Production and Supply Chain Map of Korea,' Taiwan's importance as a semiconductor export destination for South Korea has rapidly grown. While Taiwan was only the fourth-largest destination in 2022, accounting for 9.0% of exports, it is projected to become the second-largest by 2025, with a 19.9% share, trailing only China. This contrasts with China's decreasing share, which is expected to fall from 53.1% in 2022 to 40.3% in 2025.

The primary driver behind this transformation is the proliferation of generative AI and the subsequent acceleration of AI infrastructure development, including data centers. This has led to a rapid pivot towards specialized components like Graphics Processing Units (GPUs) and High Bandwidth Memory (HBM). The global AI semiconductor supply chain is solidifying around key entities: Nvidia for GPUs, Taiwan's TSMC for advanced packaging and foundries, and South Korea's Samsung Electronics and SK Hynix for HBM.

While Korea and Taiwan are still competing in the foundry sector, they have become cooperative in the memory chip segment that forms the AI supply chain.

— Jeong Seong-yeop, Head of Regional Research Support Team at the Bank of KoreaAnalyzing the evolving relationship between South Korea and Taiwan in the semiconductor industry.

This restructuring of the supply chain is boosting domestic companies' HBM production and exports, while simultaneously strengthening TSMC's dominance in the advanced foundry market and Nvidia's position in the non-memory semiconductor sector. The Bank of Korea also cited the rise of Chinese manufacturing, evolving trade environments, and the ongoing shift towards eco-friendly production systems as other major factors influencing the supply chain map.

The full-scale construction of AI infrastructure, such as data centers, has begun following the spread of generative AI.

— Bank of KoreaIdentifying the background for the changes in the semiconductor industry map.
DistantNews Editorial

Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

More Stories

From Our Blog