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Risks to the Korean Semiconductor and AI Supply Chain from Expanded U.S. AI Export Controls and Strategic Response Directions
Executive Summary
Executive Summary
The White House's post-hoc mandatory blocking of foreign access to Anthropic's frontier AI models in June 2025 signals a structural shift in the U.S. export control system, expanding comprehensively from hardware to AI software models. The fact that the access blocking order was issued just five days after SK Telecom and NVIDIA announced their gigawatt-scale AI cloud partnership symbolically demonstrates that U.S. export control decisions are primarily driven by self-centered national security and industrial interests rather than alliance cooperation logic, starkly exposing the structural vulnerability of the strategy of Korean companies relying on the U.S. AI ecosystem. However, at the same time, the bottleneck in the AI supply chain is expanding beyond GPUs to include core hardware value chains such as memory, substrates, and optical components, which Korea effectively dominates, thus structurally strengthening Korea's bargaining leverage. Accordingly, this report recommends a two-track strategy for Korean semiconductor companies: strategically deepening interdependence with the U.S. to secure institutional access guarantees while simultaneously building independent AI capabilities and alternative ecosystems. Since excessive dependence on a single partner and complete separation from the U.S. ecosystem are both realistically untenable options, Korean companies must enhance their strategic indispensability within the U.S. AI ecosystem while consolidating their structural foundation for negotiation power through strengthening their own capabilities.
Phase 1: Issue Situation Analysis
Risks to the Korean Semiconductor and AI Supply Chain from Expanded U.S. AI Export Controls
Issue Situation Analysis
1. Background and Progress of the Issue
As the U.S.-China tech hegemony competition expands beyond semiconductors into the realm of AI software models, the U.S. export control system is entering a new phase. The U.S. government has expanded the scope of export regulations from hardware (semiconductors and equipment) to include control over access to frontier AI models to prevent security-concerned countries like China and Russia from misusing advanced AI systems for military and intelligence purposes [7]. The Trump administration is pursuing this trend more aggressively, moving towards institutionalizing government intervention in the release and distribution of cutting-edge AI models by major AI companies such as Anthropic and OpenAI [9].
A decisive event occurred within this context. On June 7, 2025, SK Telecom and NVIDIA announced a partnership to build gigawatt-scale AI cloud infrastructure in Korea, seemingly positioning it as a core pillar of Korea's national AI strategy [1]. However, just five days later, on June 12, the White House ordered Anthropic to immediately cease all foreign access to its cutting-edge AI models, Mythos 5 and Fable 5 [1][7]. This marked the first instance of the government forcibly recalling publicly released frontier AI models, starkly revealing the uncertainty of U.S. AI technology access to partners worldwide, including allied nations [13].
2. Current Situation (Latest Trends)
The Anthropic incident has been resolved, not through complete revocation, but through a form of limited restoration. On June 26, the U.S. government partially allowed access to the Mythos 5 model for over 100 'trusted' domestic U.S. institutions, including Fortune 500 companies [8]. However, this measure is strictly limited to U.S. domestic institutions, and companies in allied nations, including Korea, remain blocked from access. During this process, India received a verbal assurance from the U.S. side that 'access to technology once provided will not be blocked' [12], but it is understood that no equivalent official guarantee has been made to Korea.
Meanwhile, on June 25, the U.S. hosted the second 'Pax Silica' summit in Washington, involving approximately 20 countries, to strengthen alliance cohesion for AI supply chain security [2]. At this meeting, U.S. Under Secretary of State for Economic Affairs, Jake Helberg, praised Korea as a country that 'far exceeds its weight class' in semiconductor production and technology, expressing expectations for Seoul's role in the U.S.-led AI supply chain security initiative [2]. Concurrently, China is pursuing a plan to invest $295 billion over the next five years in AI data center networks, mandating that at least 80% of the supported technology be procured from domestic suppliers [4], further structurally narrowing market access for Korean companies to China.
Domestically, the Korean government is planning to announce new semiconductor cluster development plans to address the production capacity shortage driven by the AI boom, and a presidential advisory committee member emphasized that Samsung Electronics and SK Hynix should accelerate their cluster plans by a decade. As the AI infrastructure bottleneck expands beyond GPUs to encompass the entire supply chain, including memory, substrates, and optical components, the structure is forming where U.S. capital investment is inevitably concentrated in Korea, Taiwan, and Japan, which effectively dominate these core hardware value chains [6].
3. Key Actors and Their Positions/Interests
The U.S. Trump Administrationdefines AI technology as a national security asset and is shifting its policy to allow access to frontier models only conditionally, even for allies. While Under Secretary of State Helberg praises Korea as a key partner [2], he maintains a cautious stance on establishing a formal framework that guarantees the continuity of technology access, as revealed in negotiations with India [5]. The U.S.'s core interest is to prevent advanced AI technology from leaking to adversarial nations like China and Russia, while simultaneously incorporating allied nations into a U.S.-led technological order.
Anthropicrevealed itself to be an actor subordinate to government directives rather than exercising independent corporate judgment, by blocking and then partially restoring foreign access following a government order [8][9]. This suggests limitations for U.S. AI companies in pursuing independent global business strategies and demonstrates that Korean companies relying on U.S. AI platforms are exposed to similar risks at any time [3].
The Korean Government and Companiesare in a structurally vulnerable position, deeply integrated into the U.S.-led AI supply chain system yet unable to secure stable technology access. SK Telecom is pursuing a large-scale AI cloud partnership with NVIDIA while simultaneously experiencing the shock of Anthropic's model access being blocked [1]. Samsung Electronics and SK Hynix maintain global leadership in AI core hardware such as HBM and are recognized as strategic partners by the U.S. [2][15]. However, they face a persistent dilemma between the reality of being unable to completely escape dependence on the Chinese market and the intensifying U.S. export controls on China.
Chinais accelerating the establishment of an independent technological ecosystem by mandating domestic procurement of AI infrastructure and making large-scale state investments in response to the U.S. technology blockade [4]. This acts as a factor that structurally reduces the opportunities for Korean companies to seek business in the Chinese market.
European and Other Allied Nationsare also expressing concern over the unilateral expansion of U.S. export controls. The Netherlands has opposed the MATCH Act targeting ASML and is engaged in negotiations with Washington [11], while Australia, prompted by the Anthropic access block, is emphasizing the need to build its own AI capabilities [10]. This indicates that U.S. export controls are triggering discussions on technological self-reliance across allied nations.
4. Summary of Key Issues
The first key issue is the collapse of predictability in technology access. The Anthropic incident empirically demonstrated that access to U.S. AI technology can be blocked overnight, irrespective of allied actions, based on internal circumstances of Silicon Valley companies or U.S. government security assessments [3]. This is a factor that fundamentally destabilizes the planning horizon for Korean companies that have built their business strategies on U.S. AI platforms.
The second issue is the contradiction between alliance partnerships and technology control. While the U.S. publicly praises Korea as a key partner in AI supply chain security [2], it does not provide formal, binding guarantees regarding access to frontier AI models. Compared to India, which obtained a verbal assurance [12], Korea's negotiation position appears relatively weak.
The third issue is the intensification of restrictions on access to the Chinese market. With the strengthening of U.S. export controls and China's mandate for domestic procurement progressing simultaneously, the space for Korean semiconductor and AI companies to operate in the Chinese market is being squeezed from both directions [4]. In particular, the lack of clear definition regarding what level of business relationship with China constitutes a 'suspicious criterion' for the U.S. side [4] forces Korean companies to make business decisions in an uncertain regulatory environment.
The fourth issue is the competition for technological leadership to resolve AI bottlenecks. Korea's global leadership in core AI infrastructure hardware, including HBM, is a strategic asset [6][15], but its dependence in software and models acts as a risk factor. The trend of technological bottlenecks expanding beyond GPUs to encompass memory, substrates, and optical components presents a new opportunity for Korean companies, but also serves as a warning that the scope of U.S. supply chain control may expand [6].
Phase 2: In-depth Issue Analysis
Risks to the Korean Semiconductor and AI Supply Chain from Expanded U.S. AI Export Controls
In-depth Issue Analysis
1. Analysis of the Root Causes of the Issue
The most fundamental cause of this incident lies in the U.S. redefinition of AI as a core strategic asset for national security, rather than merely a civilian technology. The Trump administration views the potential misuse of frontier AI models by military and intelligence agencies of security-concerned countries like China and Russia as an existential threat, thus undertaking a strategic shift to comprehensively expand the existing hardware-centric export control system to the software and model domains [7][9]. This signifies the emergence of a new paradigm where export controls on semiconductor equipment and advanced chips evolve into access controls on AI models themselves.
A second fundamental cause is the structural conflict between the dual-use nature of AI technology and the existing export control framework. Semiconductors or manufacturing equipment have physical substance, allowing for relatively clear demarcation of export controls. However, AI models exist in digital form and can be replicated and distributed instantly across borders, making it difficult to ensure the effectiveness of controls with existing export licensing systems. The unprecedented measure taken by the U.S. government to forcibly block access to already publicly released frontier models [13] can be considered a policy of last resort stemming from this technological specificity.
Third, the competitive dynamics among U.S. AI companies are intricately intertwined with government regulation. Questions are being raised as to whether the foreign access blocking of Anthropic stemmed solely from security assessments or if competitive interests among Silicon Valley companies played a role in the regulatory process [3]. The fact that export controls can be influenced not only by security concerns but also by inter-company competitive dynamics fundamentally undermines the predictability of technology access for allied companies. The reality that corporate competitive maneuvers can nullify the technology access rights of alliance partners overnight exposes the inherent vulnerability of the strategy of Korean companies relying on the U.S. AI ecosystem [3].
2. Structural Context
Political Structure
At the political level, this incident reflects the structural tension between the U.S.'s strategy to maintain technological hegemony and its approach to alliance management. On one hand, the U.S. praises Korea as a key semiconductor partner that 'far exceeds its weight class' and draws it into the center of the Pax Silica initiative [2]. On the other hand, it exhibits contradictory behavior by unilaterally blocking AI technology access for allied nations without prior consultation. This suggests that U.S. export control policy is primarily driven by self-centered national security and industrial interests rather than the logic of alliance cooperation.
Particularly noteworthy is the comparison with India. The U.S. provided India with a verbal assurance that 'access to technology once provided will not be blocked' [12], but no equivalent official guarantee has been made to Korea. This demonstrates the harsh reality that U.S. technology diplomacy operates based on differentiated negotiation power and strategic priorities by country, and alliance status itself does not automatically guarantee the stability of technology access. If the Korean government fails to secure more explicit and binding technology access guarantees within the Pax Silica framework, it risks remaining in an asymmetric structure where it pays the costs of alliance participation while the benefits are uncertain.
Economic Structure
Economically, Korea holds a unique position as a key node in the AI hardware supply chain. As AI evolves into the agentic stage, bottlenecks are expanding beyond GPUs to encompass the entire supply chain, including memory, substrates, and optical components, and these core hardware value chains are effectively dominated by Korea, Taiwan, and Japan [6]. Samsung Electronics and SK Hynix have secured a leading position in High Bandwidth Memory (HBM), and projections indicate that the combined operating profit of these two companies next year will reach an all-time high [15]. Thus, Korea possesses bargaining leverage as an indispensable partner supplying the physical foundation of AI infrastructure.
However, this strength is also the source of structural vulnerability. Korean companies have built their business strategies based on close integration with the U.S. AI ecosystem (NVIDIA GPUs, Anthropic/OpenAI models, etc.). The incident where Anthropic's model access was blocked just five days after the announcement of SK Telecom and NVIDIA's gigawatt-scale AI cloud partnership [1] starkly reveals the vulnerability of this integration strategy. Conversely, the Chinese market, while investing $295 billion in AI data centers over the next five years, mandates that over 80% of supported technology be domestically sourced [4], structurally shrinking the access for Korean companies to the Chinese market. Ultimately, Korean semiconductor and AI companies face the dilemma of increasing their dependence on the U.S. market while failing to secure guarantees for the stability of that access.
Security Structure
From a security perspective, the current situation demonstrates that technological control is emerging as a key instrument of new geopolitical power. The United States is building a technological alliance system centered on AI supply chain security through the Pax Silica initiative, and South Korea is incorporated as a core member of this system[2]. However, the internal logic of this system is designed to prioritize U.S. control over the autonomy of its allies. If export controls can be applied to allied companies based on security concerns and unverified suspicions, the criteria for allied access to U.S. frontier AI technologies will remain effectively unclear[4].
This security structure imposes a dual pressure on South Korea. By participating in the U.S. export control system for China, South Korea faces restrictions on access to the Chinese market, while simultaneously bearing the uncertainty that access to U.S. AI technology could be blocked at any time. China is responding by strengthening the exclusivity of its own AI ecosystem[4], making it practically impossible for South Korea to pivot towards the Chinese AI ecosystem[3]. Thus, South Korea is facing structural pressure with narrowing options at the intersection of U.S.-China technological bloc formation.
3. Comparison with Historical Precedents and Similar Cases
COCOM and the Wassenaar Arrangement
The current strengthening of AI export controls can be understood as a modern iteration of COCOM (Coordinating Committee for Multilateral Export Controls), established during the Cold War to control the export of strategic materials to the communist bloc. The COCOM regime was a mechanism for Western allies to collectively control the export of dual-use technologies to the Soviet Union and communist countries, and it transitioned to the Wassenaar Arrangement in 1996 after the end of the Cold War. The current Pax Silica initiative[2], as a new form of technological alliance control system centered on AI and semiconductor technologies, can be seen as a modern version of COCOM. However, a significant difference lies in the fact that while COCOM operated based on consensus among member states, current U.S. AI export controls tend to be unilaterally decided without prior consultation with allies.
U.S. Pressure on Japan's Semiconductor Industry (1980s)
The U.S.-Japan semiconductor friction in the 1980s provides a structurally similar precedent to South Korea's current situation. At that time, the U.S. viewed the rapid growth of Japan's semiconductor industry as a threat to its national security and industrial interests, and through the 1986 U.S.-Japan Semiconductor Agreement, it imposed restrictions on the market behavior of Japanese companies. This case illustrates that the U.S. can exert unilateral pressure on its allies if it perceives its technological and industrial hegemony to be threatened. The fact that South Korean semiconductor companies currently possess unparalleled competitiveness in core AI infrastructure technologies such as HBM[15] makes it impossible to rule out the possibility of a technological competition dynamic with the U.S. forming in the long term.
Huawei Sanctions and Supply Chain Realignment
The U.S. sanctions on Huawei in 2019 serve as the most direct precedent demonstrating how AI and semiconductor export controls can rapidly reshape global supply chains. The Huawei sanctions went beyond targeting a single company, effectively reorganizing the entire global telecommunications equipment and semiconductor supply chain based on dependence on U.S. technology. At the time, Samsung Electronics and SK Hynix were forced to halt semiconductor supplies to Huawei, leading to significant revenue losses in the short term. Current export controls on AI models possess the potential to rapidly alter the business environment for South Korean companies in a similar manner.
ASML and the Netherlands' Dilemma
The case of ASML in the Netherlands offers another important precedent for South Korea to consider. ASML, the world's sole manufacturer of extreme ultraviolet (EUV) lithography equipment, has been restricted from exporting advanced equipment to China under U.S. pressure and recently faces further restrictions due to the MATCH Act[11]. The unprecedented diplomatic action by the Dutch Minister of Trade to personally visit Washington and express concerns to Congress and the Commerce Department[11] demonstrates that technological export controls have emerged as a core diplomatic issue between allies, beyond mere trade matters. It is suggested that South Korea, similarly to ASML, needs to leverage its position as an indispensable node in the AI supply chain to pursue more proactive diplomatic responses.
4. Key Variables in Issue Development
Variable 1: U.S. Differentiated Approach to Allies
The most crucial variable in the future development of this issue will be how the U.S. differentiates among its allies regarding access to AI technology. Currently, India has secured verbal assurances[12], Australia has formalized the need to build its own AI capabilities[10], and Europe is seeking a collective response[13]. Whether South Korea can negotiate explicit and binding guarantees for technological access within the Pax Silica framework will be a key determinant of the stability of South Korea's AI ecosystem. If the U.S. applies differentiated access criteria for each ally, South Korea's negotiating power and diplomatic positioning will directly define the scope and stability of its technological access.
Variable 2: Level of Institutionalization of AI Export Controls
The extent to which the U.S. government institutionalizes export controls on AI models in a systematic and predictable manner is also a significant variable. Currently, there is uncertainty where access to technology for allied companies can be blocked overnight due to competitive maneuvering or unverified security concerns[3][4]. If the U.S. establishes an institutional framework with clear criteria and procedures, the business planning possibilities for South Korean companies will increase. Conversely, if arbitrary and retroactive control methods persist, South Korean companies will have no choice but to revise their strategies to reduce dependence on U.S. AI technology[9].
Variable 3: Speed of South Korea's Acquisition of Independent AI and Semiconductor Technological Capabilities
The speed at which South Korea can reduce its dependence on the U.S. AI ecosystem and build its own technological capabilities is also a key variable. The government's plan to create new semiconductor clusters[3] and the competitive development of AI infrastructure technology by science and engineering universities like KAIST and UNIST[15] demonstrate movement in this direction. Just as HBM originated from an idea in a KAIST research lab[15], if South Korea secures original independent technologies in next-generation AI bottleneck-solving technologies, it can buffer the impact of blocked access to U.S. AI models while strengthening its negotiating leverage. However, as this is a long-term challenge that is difficult to achieve in the short term, a dual approach is required, combining short-term risk management with long-term technological self-reliance strategies.
Variable 4: Speed of China's Advancement in Technological Self-Reliance
The speed at which China achieves self-reliance in its AI ecosystem through AI data center investments ($295 billion) and domestic procurement mandates (80%) is also an important variable for South Korea[4]. As China's technological self-reliance accelerates, South Korean companies' access to the Chinese market will become increasingly limited, potentially leading to a vicious cycle of deepening dependence on the U.S. market. Conversely, if China cannot resolve its short-term dependence on certain South Korean components or materials during its technological self-reliance process, this could serve as a temporary negotiating leverage for South Korean companies. The speed of China's technological self-reliance is an exogenous variable that will determine the effectiveness of market diversification strategies for South Korean semiconductor and AI companies, requiring continuous monitoring.
Stage 3: Scenario Analysis
U.S. AI Export Control Intensification and Risks to South Korea's Semiconductor and AI Supply Chains
Scenario Analysis
1. Optimistic Scenario — "Institutionalization of an Alliance-First Approach"
Probability of Realization: 25%
Development Direction
The optimistic scenario unfolds with the U.S. developing the Pax Silica framework into a practical technology-sharing mechanism and institutionally guaranteeing access to frontier AI models for key allies, including South Korea. U.S. Deputy Assistant Secretary of State for Economic Affairs, Jacob Helberg, publicly evaluating South Korea as a country that "punches far above its weight" in semiconductor production and technology and expecting its role in AI supply chain security initiatives[2] can be interpreted as a signal supporting the feasibility of this scenario. The precedent of the U.S. providing assurances to India that "access to technology, once provided, will not be blocked"[12], being extended to South Korea, and further, the establishment of a legally binding technology access guarantee system within a bilateral agreement or multilateral framework, are the key conditions for this scenario.
Specifically, this could unfold with the signing of an AI technology cooperation agreement between the U.S. and South Korea, and South Korean companies being officially granted trusted partner status, securing stable access to frontier models like Anthropic's Mythos 5. The current U.S. government's partial authorization of access to Mythos 5 for over 100 trusted institutions, including Fortune 500 companies[8], being extended to allied companies serves as the starting point for this scenario. Additionally, if procedural safeguards such as mandatory prior consultation with allies in export control decision-making processes and guaranteed grace periods for technology access blockages are established, the strategic uncertainty for South Korean companies could be significantly reduced.
Impact on South Korean Semiconductor Companies
If this scenario is realized, South Korean semiconductor companies can accelerate their integration with the U.S. AI ecosystem and secure significant business opportunities. SK Telecom's gigawatt-scale AI cloud partnership with NVIDIA[1] can be fully operationalized under a stable technology access environment, and Samsung Electronics and SK Hynix can further solidify their position as suppliers of HBM and next-generation memory in response to the surge in AI infrastructure demand[15]. As AI evolves to the agentic stage, bottlenecks are spreading beyond GPUs to the entire supply chain, including memory, substrates, and optical components[6]. In this context, the negotiating power of South Korean companies, which effectively dominate these core hardware value chains, will be further strengthened. Furthermore, if the South Korean government's plan to create new semiconductor clusters[3] is combined with U.S. institutional support, South Korea's strategic position in the global AI supply chain is expected to rise further.
2. Baseline Scenario — "Prolonged Structural Uncertainty and Selective Management"
Probability of Realization: 50%
Development Direction
The most probable baseline scenario involves the structural persistence of uncertainty, where U.S. AI export controls are neither fully withdrawn nor completely institutionalized. The U.S. government is likely to restrict access to specific models and technologies where security concerns are confirmed, while maintaining a case-by-case approach to minimize diplomatic friction with allies. The process by which the Anthropic incident transitioned from a complete blockage to a limited restoration[8] exemplifies the typical pattern of this scenario. That is, the U.S. is expected to repeat a pattern of taking extreme measures and then partially retreating in response to pushback and diplomatic pressure from allies.
In this scenario, the Pax Silica framework functions as a symbolic channel of cooperation but does not evolve into a legally binding technology access guarantee system. While the U.S. utilizes South Korea's semiconductor production capabilities as a strategic asset[2], it retains the discretion to restrict access to AI software models at any time based on national security judgments. The fact that export control decisions can be influenced not only by pure security assessments but also by the competitive dynamics among Silicon Valley companies[3] implies that this uncertainty has a structural nature that is difficult to resolve solely through diplomatic efforts. Concurrently, China is pursuing plans to invest $295 billion in its AI data center network over the next five years while mandating that at least 80% of the supported technologies be sourced from domestic suppliers[4], indicating a continued structural narrowing of access to the Chinese market for South Korean companies.
Impact on South Korean Semiconductor Companies
Under the baseline scenario, South Korean semiconductor companies must pursue a dual strategy of seeking a balance between dependence on the U.S. AI ecosystem and acquiring independent technological capabilities. In the short term, strategies should be designed to maximize business in areas where U.S. technology access is available, while in the medium to long term, securing alternative pathways in case of access blockage. Their position as key hardware suppliers, including HBM, provides negotiating leverage in relations with both the U.S. and China[6][15]. However, the instability of access to AI software models creates persistent uncertainty regarding the sustainability of AI services and solutions businesses built by South Korean companies. Companies like SK Telecom, which have designed their national AI strategies based on U.S. AI technology[1], face an operational burden of internalizing the risk of overnight technology access blockage and maintaining contingency plans.
The semiconductor cluster development plan being pursued by the South Korean government[3] holds significant strategic importance in this scenario. Expanding production capacity can strengthen South Korea's leverage in negotiations with the U.S. and enhance its indispensability in the global AI supply chain. The efforts by domestic science and engineering universities like KAIST to develop next-generation AI infrastructure technologies beyond HBM[15] are also evaluated as investments aimed at reducing dependence on U.S. technology and acquiring independent technological capabilities in the long term. However, it will take considerable time for these efforts to yield tangible results, and managing the strategic vacuum during this period remains a key challenge.
3. Pessimistic Scenario — "Deepening AI Technology Bloc Formation and Supply Chain Fragmentation"
Probability of Realization: 25%
Development Direction
The pessimistic scenario involves the U.S.-China technological hegemony competition escalating into full-blown technological bloc formation, placing South Korean companies in a structurally marginalized position where they cannot be fully integrated into either bloc. The key trigger for this scenario is the expansion of U.S. export controls beyond AI models to encompass related hardware, software, and cloud services, and the normalization of access restrictions to allied nations as a constant management tool rather than an isolated incident. The fact that export controls can be triggered by competitive dynamics between companies and unverified security concerns[4] suggests that this scenario is not merely an extreme hypothetical.
In this scenario, the U.S. intensifies pressure through legislation like the MATCH Act to completely block Chinese semiconductor companies' access to Western equipment, while also demanding that allied companies completely sever business ties with China. In response, China strictly enforces its mandate for 80% domestic sourcing for AI data center investments[4] and implements retaliatory measures that effectively block South Korean companies' access to the Chinese market. Simultaneously, the U.S. begins to apply criteria that consider any association by South Korean companies with the Chinese AI ecosystem as a national security threat[4]. In this case, South Korean companies will face a forced dichotomy of choosing between the U.S. market and the Chinese market.
The case of Europe provides a reference point for gauging the ripple effects of this scenario. The situation where the Dutch Minister of Trade had to personally visit Washington to express concerns about the MATCH Act and appeal for ASML's damages[11] demonstrates that U.S. export controls can directly conflict with the core industrial interests of allied nations. In South Korea's case, given that the semiconductor industry accounts for a much larger portion of the national economy than ASML does for the Netherlands, the impact if this scenario materializes could be even more severe.
Impact on South Korean Semiconductor Companies
If the pessimistic scenario materializes, South Korean semiconductor companies will face complex and severe challenges. Samsung Electronics and SK Hynix could find themselves under dual pressure, with declining sales in the Chinese market and restricted access to U.S. technology simultaneously. If China fully implements its plan to mandate that over 80% of AI data center investments be sourced from domestic suppliers[4], exports of memory semiconductors from South Korea to China are structurally bound to decrease. Concurrently, if the U.S. continues to restrict access to frontier AI models, the value added that South Korean companies can generate from AI services businesses will also be significantly reduced.
A more serious problem is that the uncertainty of technological access makes it difficult to establish long-term investment plans. The reality that export controls can be influenced by competitive dynamics between companies and that allied partners' access rights can vanish overnight[3] fundamentally shortens the strategic planning horizon for South Korean companies. The South Korean government's consideration of accelerating the cluster plans of Samsung Electronics and SK Hynix by 10 years[3] can be interpreted as a preemptive measure against this uncertainty, but in the pessimistic scenario, simply expanding production capacity may not be sufficient to offset the impact of blocked technological access. Furthermore, even if the structure where U.S. VC funding concentrates on South Korea, Japan, and Taiwan due to limitations on investment in Chinese AI companies[6] is maintained, this capital flow could weaken if the uncertainty of technological access itself undermines investment attractiveness.
4. Scenario-Based Impact Analysis on the Global Economy and Industry
AI Supply Chain Realignment and Technological Bloc Formation
A structural change commonly identified across all three scenarios is the progression of the global AI supply chain towards fragmentation into U.S.-led trusted alliance blocs and China-led self-reliant blocs. In the optimistic scenario, this fragmentation is managed within an institutionalized cooperation framework, but in the pessimistic scenario, the boundaries between these two blocs become rigid, leading to a situation where countries and companies that do not fully belong to either bloc must endure structural disadvantages. China's investment of $295 billion in AI data centers and its pursuit of 80% domestic sourcing[4] suggest that this bloc formation is already proceeding irreversibly.
Increased Strategic Value of Semiconductor Hardware Supply Chains
As access to AI software models becomes unstable due to geopolitical factors, the strategic value of hardware supply chains paradoxically increases. As AI evolves to the agentic stage, bottlenecks are spreading throughout the supply chain, beyond GPUs to memory, substrates, optical components, and more[6]. The fact that South Korea, Taiwan, and Japan effectively dominate these core hardware value chains serves as a structural strength that maintains South Korea's negotiating leverage in all three scenarios. As long as the U.S. requires South Korea as a key partner for AI supply chain security[2], South Korea's semiconductor production capacity can function as an important bargaining chip in technology access negotiations.
Pressure for Allies to Strengthen AI Self-Reliance Capabilities
The Anthropic incident has alerted the US's allies that over-reliance on US AI technology could become a strategic vulnerability. The Australian Minister for Defence emphasized the need to build domestic AI capabilities following the blocking of Anthropic access [10], and the Australian Prudential Regulation Authority warned that the incident posed significant risks to major banks [14]. In Europe, voices calling for the development of independent AI capabilities are growing, characterizing US AI export controls as a "warning shot" [13]. This trend increases the likelihood that the global AI industry will shift from a US-centric single ecosystem to multiple regional ecosystems, suggesting that for Korean companies, securing independent technological capabilities in this process is a key task for long-term survival strategy. The proactive investment by domestic science and engineering universities, including KAIST, in developing next-generation AI infrastructure technology beyond HBM [15] can be evaluated as consistent with this direction.
Investment Deterrent Effect of Export Control Uncertainty
In the baseline and pessimistic scenarios, the macroeconomic impact that warrants particular attention is the deterrent effect of export control uncertainty on global AI investment decisions. The reality that export controls can be triggered by competitive dynamics between companies and unverified security concerns, and can disrupt the strategic planning horizons of allied partners [4], acts as a factor that makes companies hesitant to make long-term investments based on US AI technology. This can slow down the pace of AI infrastructure investment in the short term and affect the speed and direction of global AI innovation in the medium to long term. From the perspective of Korean semiconductor companies, it is important to note that if this uncertainty delays customer companies' AI infrastructure investment decisions, a downside risk may arise for demand forecasts for key components such as HBM.
Step 4: Analysis of Response Measures
US AI Export Control Intensification and Risks to Korea's Semiconductor/AI Supply Chain
Analysis of Response Measures
1. Response Measures for the Optimistic Scenario — "Institutionalization of an Alliance-First Approach"
Analysis of Response Options and Their Pros and Cons
If the optimistic scenario materializes, the most crucial response direction for Korean semiconductor companies will be to maximize their strategic value within the US-led AI supply chain security framework. The first response option for this is Proactive Deepening of Formal Partnerships within the Pax Silica Framework. Given that the US publicly assesses Korea as a country that "far exceeds its weight class" in semiconductor production and technological prowess [2], Samsung Electronics and SK Hynix should move towards securing official corporate-level participation status within the Pax Silica initiative, in coordination with government channels. The advantage of this option is that it opens a path for Korean companies to officially obtain the status of a trusted partner, leveraging the precedent of the US government partially granting access to Mythos 5 to designated trusted partners [8]. However, the disadvantage of this option is that the substantive content of the partnership heavily depends on the discretion of the US side, and the technology sharing or security review conditions demanded by the US during negotiations may conflict with the protection of the companies' intellectual property.
The second response option is Building Strategic Technology Alliances with US AI Companies. As demonstrated by the gigawatt-scale AI cloud partnership between SK Telecom and NVIDIA [1], establishing cooperative relationships beyond hardware supply with key players in the US AI ecosystem can lay the structural foundation for circumventing the impact of export controls. In a situation where bottlenecks are spreading throughout the supply chain, including memory, substrates, and optical components, beyond GPUs, as AI evolves to the agentic stage [6], the fact that Korean companies effectively dominate these key hardware value chains serves as a source of bargaining power. The advantage of this option is that by deepening mutual interdependence beyond a simple supplier-customer relationship, it can create a structure where unilateral blocking of access by the US government would also impact the US AI industry itself. On the other hand, the disadvantage is that as dependence on specific US companies increases, the vulnerability where the competitive maneuvers or internal circumstances of those companies directly affect the business plans of Korean companies also grows [3].
The third response option is Urging the Korean Government to Lead the Establishment of Bilateral Technology Agreements and Strengthening Corporate Lobbying. Considering the precedent where India received verbal assurances from the US that "access to provided technology will not be blocked" [12], Korea also needs to make diplomatic efforts to secure comparable official and legally binding guarantees. Companies should support negotiations through government channels while simultaneously strengthening their lobbying capabilities in Washington to ensure that the interests of Korean companies are reflected in the export control policy-making process. The advantage of this option is that it significantly enhances long-term business predictability if institutional safeguards are established. However, the disadvantage is that diplomatic negotiations may take too long to meet the immediate business needs of companies, and the effectiveness of the agreement depends on the political will of the US administration.
Feasibility and Risk Assessment
All three response options are relatively feasible under the optimistic scenario. However, while deepening official participation within the Pax Silica framework and building technology alliances with US AI companies can be pursued relatively quickly at the corporate level, establishing bilateral technology agreements involves intergovernmental negotiations and thus requires considerable time for implementation. The greatest risk in this scenario is the possibility of another unilateral blocking incident occurring before the US's institutionalization will is translated into actual policy. Therefore, even as the optimistic scenario unfolds, companies must maintain a parallel strategy of gradually diversifying their reliance on the US AI ecosystem.
Priority Response Measures
The top priority response measure in the optimistic scenario is Building Strategic Technology Alliances with US AI Companies. Leveraging the competitive advantage of Korean companies in key hardware value chains, including HBM [15], to secure an irreplaceable position within the US AI ecosystem can yield the most immediate and substantial effects. Based on this, it is advisable to sequentially pursue the deepening of official partnerships within Pax Silica and the establishment of bilateral agreements.
2. Response Measures for the Baseline Scenario — "Prolongation and Selective Management of Structural Uncertainty"
Analysis of Response Options and Their Pros and Cons
The baseline scenario assumes a situation where uncertainty persists structurally, without US AI export controls being fully withdrawn or completely institutionalized. In this scenario, the most important response direction for Korean semiconductor companies is to accept uncertainty itself as a constant in the business environment and to employ a flexible portfolio strategy accordingly.
The first response option is Enhancing Bargaining Power by Strengthening Exclusive Technological Status within the AI Hardware Supply Chain. The projection that Samsung Electronics and SK Hynix could achieve record operating profits of approximately 1,000 trillion won next year [15] is proof of the strong technological leadership in memory semiconductors, particularly HBM. In the baseline scenario, the key is to further deepen this technological leadership, creating a structure where the expansion of AI infrastructure is impossible without the cooperation of Korean companies, independent of US government and AI companies. The efforts of domestic science and engineering universities like KAIST and UNIST to secure next-generation AI infrastructure technology [15] can be assessed as movements to solidify the long-term foundation in this direction. The advantage of this option is that as technological indispensability increases, business stability as a hardware supplier is secured, separate from the issue of AI software access affected by export controls. The disadvantage is that there is no guarantee that the current technological superiority will be maintained permanently in an environment of intensifying technological competition, and access to the Chinese market may be structurally reduced as China invests $295 billion over the next five years in AI data centers and pursues a strategy to increase its reliance on domestic suppliers to over 80% [4].
The second response option is Internalizing Independent AI Software Capabilities to Diversify Reliance on the US. The key lesson from the Anthropic incident is that "access to US AI technology can disappear overnight due to corporate competitive maneuvers" [3]. In response, Korean companies should reduce their reliance on US frontier AI models and pursue strategies to secure their own AI model development capabilities or diversify cooperation with alternative AI ecosystems domestically and internationally. The Australian Minister for Defence's emphasis on the "need to build domestic AI capabilities" following the Anthropic incident [10] supports the strategic validity of this direction. The advantage of this option is that it can fundamentally reduce vulnerability due to policy changes in a specific country or company. However, the disadvantage is that developing frontier AI models requires enormous investment and a long period of time, and it is difficult to catch up with the economies of scale demonstrated by the US and China in AI model development in a short period.
The third response option is Geographical Diversification of Supply Chains and Formation of Risk Hedging Portfolios. Korean semiconductor companies need to reorganize their portfolios to reduce reliance on the US-centric supply chain, while deepening cooperation with Japan and Taiwan and strengthening their position in the European market. The Netherlands' move to secure its own semiconductor policy space by publicly opposing the US MATCH Act, centered around ASML [11], opens a window for Korean companies to strengthen technological cooperation with Europe. The advantage of this option is that it diversifies risks associated with single-region dependence and secures business areas relatively free from the crossfire of US-China conflict. The disadvantage is that supply chain diversification involves significant initial investment costs, and efficiently managing geographically dispersed supply chains increases operational complexity.
Feasibility and Risk Assessment
In the baseline scenario, the feasibility of each of the three options is evaluated differently. Strengthening technological leadership within the AI hardware supply chain aligns with ongoing investment directions and is therefore the most feasible. In contrast, internalizing independent AI software capabilities is a medium to long-term task that is difficult to achieve tangible results in the short term. Geographical diversification of the supply chain has a medium level of feasibility; in particular, deepening cooperation with Japan and Taiwan can be pursued relatively quickly, while strengthening market entry into Europe requires a longer time horizon. The biggest risk in this scenario is that companies may fail to set a clear strategic direction and incur opportunity costs while uncertainty persists long-term. The fact that export controls "can also be influenced by competitive dynamics between companies" [3] demonstrates how important it is for companies to have internal capabilities to constantly monitor external environmental changes and rapidly adjust their strategies.
Priority Response Measures
The top priority response measure in the baseline scenario is Strengthening Exclusive Technological Status within the AI Hardware Supply Chain. This aligns with current investment directions and is the most realistic option for securing immediate business stability. A three-step approach is desirable: pursuing the internalization of independent AI software capabilities as a medium to long-term task in parallel, and diversifying risks through geographical diversification of the supply chain.
3. Response Measures for the Pessimistic Scenario — "Entrenchment of Technological Blockade and Structural Exclusion"
Analysis of Response Options and Their Pros and Cons
The pessimistic scenario represents the worst-case situation where US AI export controls are further strengthened, technological blockade becomes entrenched, and Korean companies are structurally excluded from both the US AI ecosystem and the Chinese market. Given that China is moving towards mandating that over 80% of AI data center support technologies be procured from domestic suppliers [4], the possibility of this scenario materializing cannot be underestimated.
The first response option is Strategic National Investment to Build an Independent AI Semiconductor and System Ecosystem. The projection that the Korean government's announcement of a new semiconductor cluster creation plan and Samsung Electronics and SK Hynix could advance the cluster plan by 10 years [3] indicates that the policy will for this direction is already formed. In the pessimistic scenario, this investment must go beyond simply expanding production capacity to securing independent AI semiconductor design and manufacturing capabilities that can structurally reduce reliance on the US AI ecosystem. The advantage of this option is that it can fundamentally block the impact of external export controls by securing technological sovereignty in the long term. The disadvantage is that it requires enormous investment costs and a long development period, and it is difficult to independently replicate the economies of scale demonstrated by the US and China in the AI semiconductor field.
The second response option is Building an Independent AI Supply Chain Alliance Centered on Korea, Japan, and Taiwan. The fact that Korea, Taiwan, and Japan effectively dominate the AI core hardware value chain [6] provides a structural basis for these three countries to form a joint negotiating bloc to counter unilateral US export controls. Just as the Netherlands is publicly opposing the US MATCH Act with ASML at its forefront [11], Korea can pursue a strategy of exercising collective influence in the export control policy-making process by forming an alliance with Japan and Taiwan. The advantage of this option is that while it is difficult for any single country to influence US policy, the three countries together can exert collective bargaining power that effectively controls the core supply chain of the US AI industry. The disadvantage is that Korea, Japan, and Taiwan each have different interests in their bilateral relationships with the US, making it realistically difficult to form a united front.
The third response option is Focusing Investment on On-Device AI and Edge Computing Capabilities to Minimize Reliance on AI Software Access. If cloud-based access to US frontier AI models is blocked, on-device AI and edge computing become alternative pathways to implement AI functionalities while reducing reliance on external AI services. The focus of domestic science and engineering universities like KAIST and UNIST on on-device AI research [15] shows that the technological foundation for this direction is already being formed. The advantage of this option is that it can directly block the impact of export controls by structurally reducing reliance on cloud-based AI services. The disadvantage is that on-device AI has performance limitations compared to cloud-based frontier models, and its role as a substitute is limited in certain high-performance AI application areas.
Feasibility and Risk Assessment
In the pessimistic scenario, the feasibility of the three options is generally low to medium. Building an independent AI semiconductor ecosystem has the highest strategic value but is a long-term endeavor requiring a time horizon of over 10 years for implementation. Building a trilateral alliance depends heavily on political will and diplomatic capabilities, making it difficult to achieve tangible results in the short term. Focusing investment on on-device AI capabilities can be pursued most quickly among the three options, but due to performance limitations, it cannot be a complete alternative. The greatest risk in the pessimistic scenario is the situation where the speed of entrenchment of technological blockade outpaces the speed at which Korean companies can build their response capabilities. Considering the reality that export controls "can disappear overnight due to corporate competitive maneuvers" [3], the transition to a pessimistic scenario can occur abruptly and without warning.
Priority Response Measures
The top priority response measure in the pessimistic scenario is Building an independent AI supply chain alliance centered on South Korea, Japan, and TaiwanThis offers the most substantial negotiation leverage in the short term and forms a structural basis for the three countries to jointly influence U.S. export control policies. Concurrently, a phased approach is necessary, involving parallel concentrated investment in on-device AI capabilities to prepare for short-term technological access blockades, and setting the establishment of an independent AI semiconductor ecosystem as a long-term goal.
4. Common Strategy Recommendations Across Scenarios
Across the three scenarios, there are strategic directions that South Korean semiconductor companies should pursue universally, regardless of the circumstances. First, Establishing a monitoring and early warning system for export control environmentsAs revealed in the Anthropic incident, export control decisions can be made without prior notice [1][3], and companies must possess internal capabilities to track policy trends in Washington in real-time and rapidly assess their impact. Second, Maintaining a multi-layered portfolio for technology accessA hedging strategy is essential, involving parallel development of alternative AI technology partnerships and in-house capabilities, to prepare for potential blockades in accessing the U.S. AI ecosystem. Third, Institutionalizing government-industry cooperation channelsAs exemplified by India's government-level negotiations securing guaranteed technology access [12], responding to export controls cannot be solely reliant on individual companies' efforts and requires close cooperation with the government. The current strategic environment, where the U.S. government assesses South Korea as a key partner in AI supply chain security [2], signifies an open window to fully leverage such government-level negotiation power.
Phase 5: Final Recommended Response Measures
Strengthening U.S. AI Export Controls and Risks to South Korea's Semiconductor and AI Supply Chain
Final Recommended Response Measures and Implementation Plan
1. Comprehensive Assessment and Recommended Response Measures
Core Assessment
The recent Anthropic incident is not merely a one-off policy shock but a harbinger of a structural shift in the U.S.'s technological hegemony strategy, evolving from hardware control to controlling access to AI models. The U.S. government's unprecedented retroactive enforcement action to block overseas access to already publicly released frontier AI models [13] starkly revealed the vulnerability of strategies relying solely on the U.S. AI ecosystem [3]. The timing of the White House's order to block access, merely five days after SK Telecom and NVIDIA announced their gigawatt-scale AI cloud partnership [1], symbolically underscores that U.S. export control decisions are primarily driven by national security and industrial interests rather than alliance cooperation.
However, we must also soberly recognize that South Korea's strategic standing is higher than ever. As AI evolves into an agentic stage, bottlenecks are spreading throughout the supply chain, beyond GPUs to include memory, substrates, and optical components [6]. In this context, South Korea's leverage, which effectively controls these core hardware value chains, is structurally strengthening. The U.S. senior official's public assessment of South Korea as a "country punching far above its weight" and expectations for its role in AI supply chain security initiatives [2] provide grounds for South Korea to act not merely as a beneficiary but as an active negotiating party.
Based on this comprehensive assessment, this report proposes "Securing Access Through Deepened Strategic Indispensability" as the core recommended response measure for South Korean semiconductor companies. This entails a dual strategy: deepening interdependence so that the U.S. cannot achieve its AI supply chain goals without South Korea's technological contributions, while simultaneously moving away from unilateral dependence on U.S. AI technology by developing in-house capabilities and alternative ecosystems. Excessive reliance on a single partner can dismantle a business foundation overnight, as the Anthropic incident demonstrated; conversely, complete separation from the U.S. ecosystem is also practically impossible. Therefore, pursuing both enhanced cooperation with the U.S. and strengthening domestic capabilities through a two-track approach is the most rational strategic choice at this juncture.
Summary of Recommended Response Measures
The recommended response measures consist of three pillars. The first is Securing institutional access guarantees with the U.S., which involves diplomatic efforts to secure formal guarantees comparable to those India obtained from the U.S. side-"that provided technology access will not be blocked" [12]. The second is Strategic utilization of hardware indispensability, maximizing the negotiation power of South Korean companies within the U.S. AI ecosystem based on leadership in next-generation memory technologies beyond HBM [15]. The third is Phased development of indigenous AI software capabilities, which entails sustained mid- to long-term investment to strengthen domestic AI models and infrastructure capabilities while gradually reducing dependence on U.S. frontier models.
2. Short-Term/Mid-Term/Long-Term Implementation Plan
Short-Term Implementation Plan (0-6 months): Minimizing Risk Exposure and Building Negotiation Foundations
In the short term, the most urgent task is to precisely diagnose the extent to which ongoing AI projects are exposed to changes in U.S. export controls and to implement immediate risk mitigation measures. Businesses with high dependence on U.S. AI technology, such as the gigawatt-scale AI cloud project by SK Telecom and NVIDIA [1], must explicitly include clauses in their contracts to address potential technology access blockades, and legal and compliance teams should focus their capabilities on export control monitoring.
Concurrently, efforts to secure diplomatic assurances through government channels must commence immediately. The timing of the U.S. publicly expressing expectations for South Korea's role at the second Pax Silica Summit [2] presents an optimal diplomatic window for South Korea to demand concrete technology access guarantees at the negotiation table. Companies should work closely with the government to set negotiation agendas for the formalization of a U.S.-ROK AI technology cooperation agreement or trusted partner status, aiming for institutional mechanisms with legal binding force that go beyond the verbal assurances obtained by India [12].
Furthermore, in conjunction with current plans for semiconductor cluster development [3], efforts should be made to actively attract investment from U.S. AI companies into South Korea. The more U.S. companies physically invest in South Korean infrastructure, the higher the political and economic costs for the U.S. government to unilaterally block South Korea's technology access. This serves as a practical defensive measure to secure de facto access stability before institutional guarantees are established.
Mid-Term Implementation Plan (6 months - 2 years): Deepening Strategic Indispensability and Diversifying Technology
In the mid-term, a dual strategy must be fully implemented to structurally enhance the negotiation leverage of South Korean companies within the U.S. AI ecosystem while diversifying dependence on specific technology partners. The key to strengthening negotiation leverage lies in securing leadership in next-generation AI infrastructure technologies beyond HBM. As AI bottlenecks are expanding across the supply chain, including substrates, optical components, and cooling systems, beyond memory [6], it is crucial to preemptively secure core next-generation AI infrastructure technologies through enhanced industry-academia cooperation with domestic research institutions such as KAIST and UNIST [15]. Just as HBM originated from ideas conceived in KAIST labs and flourished in industry [15], the next generation of AI bottleneck-solving technologies can also be discovered within the domestic research ecosystem.
In terms of technology diversification, a strategy to gradually reduce dependence on U.S. frontier AI models is necessary. This does not mean abandoning cooperation with the U.S., but rather strengthening the foundation of negotiation power by expanding investments in domestic AI semiconductor startups like Rebellions [6] and cultivating in-house AI model development capabilities. Given that China is investing $295 billion in its AI data center network while mandating over 80% of supported technologies be domestically sourced [4], and considering the structural narrowing of South Korean companies' access to the Chinese market, strengthening market position in the U.S. and securing indigenous technological capabilities are not options but necessities.
Furthermore, exploring possibilities for technological cooperation with Europe in the mid-term is warranted. The Netherlands' public opposition to the U.S.'s CHIPS Act, centered around ASML, and its assertion of independent technological sovereignty [11] suggest the potential for a coordinated response from allies to unilateral U.S. export controls. South Korea jointly demanding procedural safeguards from the U.S., such as mandatory prior consultation in export control decision-making and guaranteed grace periods for technology access blockades, in collaboration with Europe, could be a viable diplomatic strategy in the mid-term.
Long-Term Implementation Plan (2+ years): Building a Self-Reliant AI Ecosystem and Leading Global Standards
In the long term, the goal for South Korean semiconductor companies should be to transition from being passive beneficiaries of the U.S. AI ecosystem to becoming active designers of the global AI supply chain. The key task for this is a vertical integration strategy that combines hardware strengths with software and system capabilities. The projected record-breaking operating profits of approximately 1,000 trillion KRW for Samsung Electronics and SK Hynix combined next year [15] are attributable to their leadership in HBM, but sustained hardware superiority requires close integration with the AI software stack. Building an ecosystem where memory architecture is designed to optimize AI model computations, and conversely, AI models are co-developed to maximally leverage the characteristics of Korean-made memory, will be the source of long-term competitive advantage.
Furthermore, based on the structural reality that South Korea, Taiwan, and Japan effectively control the core hardware value chains [6], leading the formation of a Northeast Asian AI hardware alliance is also worth considering as a long-term strategy. In a structure where U.S. VC investment is inevitably concentrated in South Korea, Japan, and Taiwan, excluding China [6], if these three countries can jointly voice their positions in shaping AI infrastructure standards and supply chain norms, they can secure structural leverage against unilateral U.S. export controls. This is not about confrontation with the U.S., but a strategic repositioning to rebalance power within the alliance.
3. Monitoring Indicators and Trigger Points
Key Monitoring Indicators
The key indicators that South Korean semiconductor companies should continuously track can be broadly categorized into three areas. The first is U.S. Export Control Policy Trends. Key tracking targets include whether restrictions on overseas access to Anthropic's Mythos 5 and Fable 5 are eased or expanded, whether the scope of allied nations granted trusted partner status is broadened [8], and the progress of legislation officially classifying AI models as export control items. In particular, whether the U.S. government introduces a prior consultation process with allies when making export control decisions is the most critical indicator determining the strategic predictability for South Korean companies.
The second is the Substantive Progress of the Pax Silica Initiative. Continuous evaluation is needed on whether the third or subsequent summits are held and their agendas, whether South Korea's participation status is elevated, and whether the initiative evolves into a practical technology-sharing mechanism or remains at a declarative level [2]. Whether the technology access guarantee obtained by India is officially extended to South Korea is a particularly important monitoring point [12].
The third is the Pace of China's AI Supply Chain Self-Reliance. The speed at which China achieves its goal of 80% domestic sourcing in AI data center network investments [4], and the progress in indigenous AI semiconductor development by Chinese companies like Huawei, are key indicators for gauging the accessibility of the Chinese market for South Korean companies. If the pace at which the Chinese market is structurally closing is faster than anticipated, efforts to strengthen market position in the U.S. and secure indigenous technological capabilities must be accelerated.
Strategy Shift Trigger Points
The trigger points for considering a strategic direction shift from the currently recommended two-track strategy are as follows. Trigger for Transition to an Optimistic Scenario includes the official signing of a U.S.-ROK AI technology cooperation agreement or the official inclusion of South Korean companies in the U.S. government's trusted partner list. In this case, resources can be concentrated on deepening integration with the U.S. AI ecosystem, and the proportion of investment in indigenous AI model development can be adjusted.
Conversely, Triggers for a shift to a pessimistic scenarioinclude the United States imposing additional AI technology access restrictions on South Korean companies or explicitly refusing to introduce a consultation process with allies in export control decisions. Furthermore, if the MATCH Act passes Congress and disrupts the core semiconductor equipment supply chain, such as ASML [11], it could directly impact the production capacity of South Korean companies, necessitating an immediate review of supply chain restructuring. In this case, the strategy must shift towards significantly expanding investment in building indigenous AI infrastructure capabilities and forming a Northeast Asian technology alliance.
4. Summary Conclusion
The Anthropic incident signaled the beginning of a new paradigm where U.S. AI export controls are expanding from hardware to the realm of software models. South Korean semiconductor companies, as key hardware suppliers in the U.S. AI ecosystem, possess structurally strong negotiation leverage. However, they also face a structural dependency that makes them vulnerable to unilateral U.S. restrictions on technology access. Recognizing both these realities is the starting point for developing an appropriate strategy.
The core recommended strategy, "Acquiring Assured Access Through Deepening Strategic Indispensability," is not about abandoning cooperation with the U.S. or shifting towards China. Instead, it is a dual strategy that deepens interdependence, ensuring the U.S. cannot achieve its AI supply chain goals without South Korea, while simultaneously strengthening indigenous capabilities. In the short term, the focus should be on minimizing risk exposure and securing diplomatic assurances. In the medium term, the direction for South Korean semiconductor companies should be to secure leadership in next-generation AI infrastructure technology, diversify technological dependencies, and in the long term, build a vertically integrated ecosystem that combines hardware strengths with software capabilities.
The reality that export controls can be influenced by inter-company competition [3], and the lesson that technology access can vanish overnight [1], clearly teach South Korean companies the necessity of strategic diversification, avoiding over-reliance on any single partner. Now is the time to initiate that structural transformation.
References
[3] [Nikkei Asia] South Korea plans new chip cluster as AI boom strains capacity
[4] [Nikkei Asia] China expo draws Nvidia, Apple, Micron as Beijing guards AI supply chain
[7] [Wired] I Met With China’s Top AI Experts. They’re Freaking Out, Too
[8] [Business Times (SG)] US allows Anthropic to release Mythos AI to ‘trusted’ US organizations
[9] [TechCrunch] It’s not about Anthropic vs. OpenAI anymore
[10] [Australian Financial Review] Anthropic ban shows Australia must build AI capability: Marles
[11] [TechCrunch] Europe is pushing back on Washington’s chip war
[13] [NRC Handelsblad] How Europe must respond to America’s AI warning shot
*This text is an AI translation of an original written in Korean. Some translations or nuances may be inaccurate.