"The 'Butterfly Effect of AI': The Bank of Korea's Updated Map Reveals South Korea's Manufacturing Has Transformed in Just Three Years"

Impact of Soaring AI Demand... Major Shifts in the Semiconductor Ecosystem

Semiconductor Exports to Taiwan Jump, Now Second Largest After China

Rising Semiconductor Production Drives Increased Imports of Materials, Parts, and Equipment

ASML's Influence: Netherlands’ Import Share Rises to 26.0%

Over the past three years, South Korea's semiconductor ecosystem has undergone significant changes. This shift is primarily driven by the restructuring of global production networks and the expansion of demand centered around artificial intelligence (AI).

On the 27th, the Bank of Korea published a revised edition of its 'Major Domestic Manufacturing Production and Supply Chain Map,' stating, "Since first releasing the map in 2023, the global industrial environment has seen considerable shifts, owing to the proliferation of AI, the growth of China's manufacturing sector combined with a strengthening of protectionism, and the expansion of environmentally friendly regulations." The Bank further emphasized, "As a result of adapting to these changes, the regional production structures and the export-import structures by industry within South Korea’s manufacturing sector have also been rapidly reorganized."

The most significant change has occurred within the semiconductor ecosystem, which has been impacted by the surge in AI demand. After the launch of generative AI services like ChatGPT at the end of 2022, investment in data centers and AI computing infrastructure rose quickly, leading to a global reorganization of the semiconductor supply chain centered on AI. The products manufactured and capital expenditure directions of South Korea’s semiconductor industry are also being realigned to keep pace with this shift. Jeong Seong-yeop, head of the Regional Research Support Team at the Bank of Korea’s Research Bureau, noted, "These changes are not confined to semiconductor production, but also extend to related sectors such as semiconductor manufacturing equipment, electrical equipment, display, and telecommunications devices, creating both direct and indirect ripple effects across the entire industry."

There has also been a significant transformation in the country-by-country structure of South Korea's semiconductor exports. Exports to Taiwan, in particular, have seen a sharp increase. In 2022, Taiwan was the fourth-largest destination for South Korean semiconductor exports (accounting for 9.0%), but by 2025, it has emerged as the second-largest (19.9%), following China. While China remains the largest export destination, both the export volume and percentage share to China have declined compared to 2022. In addition, countries where many domestic manufacturing firms have production bases, such as Vietnam and the United States, continue to maintain a high share as major export destinations for semiconductors.

This shift is a result of full-scale AI infrastructure construction—including data centers—following the widespread proliferation of generative AI. Jeong explained, "As demand rapidly shifts from conventional CPUs and generic DRAMs to GPUs specialized for AI computation and high-bandwidth memory (HBM), a global AI semiconductor supply chain has been established, with the United States’ Nvidia (GPU), Taiwan’s TSMC (advanced packaging and foundry), and South Korea’s Samsung Electronics and SK hynix (HBM) forming a core axis."

This reshaping of the supply chain has not only driven the expansion in HBM production and exports by South Korean firms, but also strengthened TSMC's dominance in the advanced foundry market and Nvidia’s presence in the non-memory semiconductor market.As a result, Samsung Electronics and SK hynix now lead the global memory semiconductor market and, boosted by growing demand for AI semiconductors, are seeing their dominance further solidify. In the design, foundry, and other non-memory sectors, American and Taiwanese companies maintain market leadership.

As semiconductor production expands, imports of materials, parts, and equipment are also increasing rapidly. Notably, dependence on imports from specific countries remains high. Jeong pointed out, "This indicates that the global semiconductor industry is becoming vertically integrated, with specialization by sector along the value chain." A prime example is that ASML in the Netherlands essentially monopolizes the supply of EUV lithography equipment, which is essential for advanced semiconductor manufacturing, leading South Korea to rely entirely on imports for these machines.

Amid the recent expansion of domestic advanced semiconductor production, imports of semiconductor manufacturing equipment have also risen. In this process, the share of imports from the Netherlands jumped from 22.8% in 2022 to 26.0% last year, making the Netherlands the largest exporter of semiconductor manufacturing equipment to South Korea during this period. In addition to the Netherlands, Japan and the United States also account for a large proportion of these equipment imports. Jeong explained, "For semiconductor materials and parts, South Korea’s dependence on imports from China, Japan, and the United States is high, meaning that the country’s semiconductor industry is highly connected to the supply chains of specific countries for key materials, parts, and equipment."

This content was produced with the assistance of AI translation services.