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Korean Industrial Insight No. 2 of AI, Semiconductors, Batteries and Electric vehicles

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2024-07-09

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Ⅰ. AI INDUSTRY TRENDS
1."Capture the 22 trillion market"… Samsung Electro-Mechanics and LG Innotek, Aiming at AI semiconductor substrates

- 'Investment of 1 trillion won', Samsung Electro-Mechanics Vietnam plant recently starts operation... Mass production of FC-BGA for IT
- LG Innotek, Starting production at Gumi plant in February... Launching promotion for big tech clients
- Fierce battle for leadership with ‘Powerhouses’ Japan and Taiwan... Accelerating order-taking activity and technology development

Samsung Electro-Mechanics and LG Innotek have entered into a fierce competition to dominate the ‘artificial intelligence (AI) semiconductor substrate’ market. AI semiconductor substrates are called the future food.
It is of interest whether these domestic companies will be able to take the lead over Japan and Taiwan, the absolute powerhouses of semiconductor substrates.
It has been reported that Samsung Electro-Mechanics' Vietnam production plant has recently begun mass production of flip chip ball grid array (FC-BGA) products. This product is expected to be used in laptops, tablets, and smartphones equipped with AI.

Samsung Electro-Mechanics has invested more than 1 trillion won into its Vietnamese production plant since 2021.
An industry official said, "it means that customers have been secured that mass production of the product has started," adding, "the Vietnamese factory mainly produces AI semiconductor substrates for IT products, but in the future, there is a possibility of producing substrates for servers, networks, and electronics (electrical and electronic devices for vehicles)."

FC-BGA, a highly integrated package board that connects the semiconductor chip and the main board with a flip chip bump, has a fast information processing speed and is mainly applied to semiconductors for high-performance computing (HPC). In particular, as the AI market such as big data and machine learning grows, the FC-BGA market is also growing rapidly.

According to Fuji Camera Research Institute, the global FC-BGA market size is expected to more than double from $8 billion (approximately KRW 11.12 trillion) in 2022 to $16.4 billion (approximately KRW 22.796 trillion) in 2030.
Paying attention to the market potential, LG Innotek also entered the market with beginning mass production of FC-BGA in February. It is known that this product, produced at the Gumi factory in Gyeongbuk, is also undergoing quality testing with a customer for IT use.

However, the current FC-BGA market is led by Japan's Ibiden and Shinko Denki, and Taiwan's Unimicron. Based on sales in 2022, the market share of Japanese and Taiwanese companies was 69%, but the market share of Korean companies was around 10%.
In this situation, if Samsung Electro-Mechanics and LG Innotek want to increase their market influence, mass production and technology development through active order-taking activities are urgent.
"We plan to start mass production of FC-BGA for AI in the second half of this year and are in discussions with several customers”, JANG Deok-Hyeon President of Samsung Electro-Mechanics, said in March and “we will more than double AI-related sales every year by diversifying applications and customers."

In the last first quarter, the sales of Samsung Electro-Mechanics' package solution division, which is responsible for semiconductor package substrates, was 427.975 billion won. Securities analysts predict that sales of the package solution division will exceed 1.8 trillion won this year thanks to demand for AI.

LG Innotek is currently launching promotions targeting global big tech companies to secure customers. MOON Hyuk-soo, CEO of LG Innotek also said at the general shareholders' meeting last March, regarding FC-BGA "sales will increase in meaningful numbers as early as August of this year, or in October at the latest."


2. “Focus on practical use of AI”... ‘AI Prompt Big Bang Conference’ held

- About 150 people, gathering at the DMC High-Tech Industry Center in Seoul... 7 experts presented specific practical cases

The AI Prompt Big Bang Conference was successfully held at the DMC High-Tech Industry Center in Seoul on the 25th with about 150 people in attendance. This conference attracted attention in that it was a hands-on practice-centered event that focused on how AI can be effectively utilized in actual workplaces, rather than simply improving business productivity.

The conference addressed practical ways to use AI rather than ethical or institutional issues of AI. The focus was on designing prompts where AI would provide answers tailored to actual situations and allow workers to use AI to improve work efficiency. Participants evaluated that they were able to experience the forefront of AI utilization and learn specific methods that can be applied to actual work.
At this conference, practitioners and managers from various companies participated as speakers and shared productivity improvement cases using AI. With detailed practical background information, scholars and experts also provided participants with know-how and experience that can be applied to actual work.
The director of the Korea Generative AI Research Institute gave a keynote lecture on the topic of ‘Wisdom of Using AI for Innovation in Business Practice.’ The director emphasized, “generative AI is leading innovation across industries and greatly improving corporate productivity and work efficiency.” He explained “prompt design has a significant impact on the output of generative AI, so it is important for practitioners to be proficient in handling it.”

The director covered in detail how generative AI works, key elements of prompt design, successful prompt design strategies, and how to optimize interaction with AI. In addition, the director guided practitioners to acquire practical experiential knowledge through specific cases of applying AI to business practice, such as break-even point analysis using AI and derivation of wine recommendation plans for each age group. Together, it was proposed to expand creative thinking and develop problem solving ability of practical business through interaction with AI.

In the first session, CHO Young-chan SK SUNI RF shared the secret of success in utilizing AI obtained through the 'Digital Me with Generative AI' training program that SK is implementing to help members solve field tasks. At the conference, presentations were made focusing on the case of 'brand campaign planning and customer complaint data analysis', which will attract attention among practical business field task solution cases
First, the AI use case for brand campaign planning showed a prompt design that sets marketing direction based on data. Prompts for customer complaint data analysis are designed to perform various tasks such as exploratory analysis, cause analysis, visualization, and report writing, etc.. AI that reflects this has practically shown that it can contribute to promoting work innovation and improving productivity by generating appropriate answers to the situation.

In Session 2, PARK Kyunghye, professor of Chungnam National University gave a presentation on the topic of ‘AI Prompt Design for Strategic Decision Making.’ Professor PARK emphasized the importance of entering specific instructions and examples of desired results as the basic principles of prompt writing. In addition, strategic decision-making support methods using various frameworks such as SCAMPER, Fishbone Analysis, 5HATS, and KPI were introduced and practical application cases were shared.
This presentation specifically focused on designing AI prompts for data analysis and deriving insights. Professor PARK explained how prompt design using AI can be effectively designed to support data-based decision-making, and suggested practical application methods.
SHIN Dong-hyeong head of Rsupport’s strategic planning team, made a presentation in Session 3 about the efficiency and convenience of report writing using AI. He compared and analyzed the pros and cons and characteristics of various AI services such as ChatGPT, Gemini, and Claude in depth, identified the specialized functions and strengths of each service, and suggested a method of selecting an appropriate service according to the purpose of use. Besides, the prompting checkpoints and precautions required when writing reports were explained in detail to help participants utilize AI effectively.

Through this, participants were provided with a practical way to quickly and easily create high-quality reports using AI. In addition, through simple exercises, participants were given the opportunity to write a report using AI. While performing tasks such as summarizing YouTube video content or combining newspaper articles to write a report, ways to improve AI utilization capabilities were shared.
LEE Seunghee professor of Kumoh Engineering College, who presented on the topic of 'Maximizing Marketing Performance through AI Prompt Optimization' in Session 4, shared various methods and examples of how to maximize marketing performance through generative AI prompt optimization. This session demonstrated that generative AI tools such as ChatGPT can also play a very important role in the marketing field. It is predicted that ChatGPT will contribute a lot to marketing practice in the future because ChatGPT can be used in tasks such as creating complex marketing strategies, writing sales cold emails, and coming up with new product ideas to make it easier.
In Session 5, PARK Se-yong CEO of Ascent Korea, gave a presentation on the topic ‘Data Value Discovered through AI: Tuning generative AI prompts and how to implement RAG.’ CEO Park shared examples of brand campaign planning and customer complaint data analysis using AI, and introduced how to use Listening Mind to identify consumer personas and purchase context (Category Entry Points). Listening Mind provides consumer’s search terms and content to LLM and outputs prompts that marketers can easily use. He emphasized the importance of continuous updating of prompt design, saying, “in order to continuously track and update changing consumer intent, it is essential to secure search data and design a structure to input it into LLM.”

3. Enhancing data platform with AI deep learning … Accelerating new drug development using open innovation

Recently, artificial intelligence (AI) technology has been attracting attention as a game changer for new drug development in the pharmaceutical and bio industry, and JW Pharmaceutical is focusing on developing innovative new drugs using its own platform and AI technology.
JW Pharmaceutical is currently developing innovative new drugs tailored to patients based on the data science platforms ‘JEWLERY’ and ‘CLOVER’ developed with its own technology.

JEWLERY is a platform to discover drugs that activate or inhibit the Wnt signal transduction pathway. Consisting of a genome database of tissues collected from animal models as well as cell lines related to various diseases, a library of over 27,000 compounds, and a Wnt signal-regulating drug screening system, drug evaluation and study mechanisms that act on the Wnt signaling pathway is possible.
CLOVER is the R&D platform of C&C New Drug Research Institute, a research subsidiary of JW Pharmaceutical. It has strengths in evaluation and mechanism study of STAT activity-modulating drugs. CLOVER is a big data platform based on various immune disease models, including cell lines derived from cancer patients, and includes a chemical molecular modeling development program developed by C&C New Drug Research Institute.
Last year, JW Pharmaceuticals integrated and operated these platforms and further advanced the platform by strengthening the application of deep learning technology as well as AI. This has further increased efficiency in identifying targets for new drugs and designing drugs.

Another feature is that a web-portal environment was established considering the convenience of researchers. Researchers can analyze genome-drug activity data and use AI and 3D structure visualization programs in a virtual web environment.


4. 22nd National Assembly, formed in one month … Will the resumption of the AI Basic Act be speeded up?

The 22nd National Assembly is expected to speed up the enactment of the Basic Artificial Intelligence (AI) Act, which was abolished in the 21st National Assembly.
'AI Basic Act' is an essential bill to establish a legal basis for fostering the AI industry and punishment standards to prevent related crimes. But it failed to pass the threshold of the 21st National Assembly and was automatically abolished upon expiration of its term. In this National Assembly, expectations are high for the promotion of a new bill that analyze the problems of the previous bill and supplement its contents.

According to the National Assembly, the enactment of the AI Basic Act is expected to gain momentum as both the ruling and opposition parties recognize the importance of AI technology and rush to propose related bills.
People Power Party Rep. AHN Cheol-soo was the first person to open the gun Last month, Rep. AHN Cheol-soo proposed the first bill, ‘Act on Artificial Intelligence Industry Promotion and Trust Securement'. This bill includes the establishment of a basic plan for artificial intelligence every three years, the operation of an artificial intelligence safety research center, and the imposition of an obligation to label results created with generative AI.

The National Assembly launches the AI Forum together with the Internet Enterprise Association. This forum is a place to collect various opinions necessary for enacting the Basic AI Act and discuss various technical and ethical issues.

Since it usually takes more than a year at the earliest to go through all the relevant procedures, including proposal of a bill, review by the relevant committee, pass and promulgation of the plenary session, some are concerned about whether it will be possible to prepare a bill suitable for the field of AI technology that is developing day by day, but there is one voice on the need to establish a basic act.
This is because a basic law must be enacted first, then budget input for industry development and punishment grounds for regulation can be prepared. After the basic law is enacted, response to changes such as technological development can be supplemented through sufficient revision work.

The head of the Innovation and Growth Division of the Korea Software Industry Association (KOSA) said, “the promotion of domestic industries and global expansion are only possible when trust and safety in the use of AI technology are secured, so there is no difference of opinion between the industry and civil society in a large sense” and emphasized “it is most important to proceed quickly with legislative procedures, including gathering opinions, in this National Assembly and quickly promote the enactment of the AI Basic Act.”


Ⅱ. SEMICONDUCTOR INDUSTRY TRENDS

1. "Memory semiconductor boom"… Samsung Electronics forecasts second quarter operating profit of 8 trillion won

- DRAM and NAND prices are rising due to AI boom and memory demand recovery … Remarkable improvement in profitability

Samsung Electronics is expected to continue its strong performance improvement in the second quarter of this year, thanks to the recovery in memory demand due to the boom in the generative artificial intelligence (AI) market.
Samsung Electronics plans to release its preliminary earnings for the second quarter of this year on the 5th of next month. Recently, the memory semiconductor market has shown a recovery in demand comparable to the past boom period, and the rapid improvement in performance is expected to continue following the performance rebound in the first quarter of this year.

According to financial information company FnGuide, Samsung Electronics' operating profit forecast for this year, estimated by domestic securities firms, is around 8.2088 trillion won. It is expected to show a clear improvement in performance following the KRW 6.606 trillion recorded in the first quarter, when the company succeeded in rebounding its performance by recording an earnings surprise.
Sales in the second quarter are estimated to reach more than 73.5 trillion won. Some predict that there is a possibility of breaking the previous record of quarterly sales of 77.78 trillion won in the first quarter of 2022.
Improvement in performance of the Device Solutions (DS) division, which handles the semiconductor business, is expected to lead overall performance. The DS division continued to perform poorly last year, recording an annual operating loss of 15 trillion won. However, thanks to the industry recovery that began in the second half last year, it recorded sales of 23.14 trillion won and operating profit of 1.91 trillion won in the first quarter, successfully turning into a surplus for the first time in five quarters since the fourth quarter of 2022.
In addition, the semiconductor economy is showing a rapid recovery, and sales and operating profit in the second quarter are expected to expand further. Securities analysts estimate that the DS division's sales will reach 26-27 trillion won and operating profit will reach 4 trillion won

This year, the global semiconductor market is entering a boom period due to the AI craze. As demand due to AI increases significantly, DRAM and NAND flash prices also maintain a steady upward trend, realizing operating profits at the level of past boom times in the general-purpose memory market. KO Young-min, a researcher at Daol Investment & Securities, predicted, “in the case of general-purpose semiconductors, it is positive that they are showing signs of recovery centered on general servers, starting in the second quarter,” and added, “the performance leverage effect of semiconductors will gradually become more serious.”
If the increase in sales of high bandwidth memory (HBM) is added, the upward trend in performance this year is expected to further strengthen. Samsung Electronics has not yet received certification for its latest product, HBM3E, from Nvidia, a major player in HBM. However, the industry believes that it is actually only a matter of time before Samsung Electronics' HBM3E is delivered to NVIDIA.
Earlier this month, Nvidia's CEO Jensen Huang said, "Samsung Electronics, SK Hynix, and Micron will all provide us with HBM," and added, "we need to be patient." In addition to NVIDIA, many big techs are also competing to release AI accelerators and thus the demand for HBM, which is considered an essential component, is increasing significantly, and these companies are also adopting a strategy to disperse HBM suppliers in terms of supply chain management. Although Samsung Electronics is still behind its competitor, SK Hynix, in the HBM market, it is expected that HBM sales will become visible from the second half of this year as the market is rapidly expanding.

2. Samsung concludes semiconductor strategy meeting… Attention to the implementation of JEON Young-hyun's reform plan.

- The first strategic meeting after taking office as head of the division... HBM•Foundry falls behind competitors

Samsung Electronics' Device Solutions (DS, Semiconductor) Division held its first strategic meeting on the 26th since the inauguration of DS Division Head (Vice Chairman) JEON Young-hyeon.
According to Samsung Electronics, a DS division strategy meeting was held at the Hwaseong Campus in Gyeonggi Province on this day. It is reported that the meeting lasted 3 to 4 hours with fewer executives attending than last year.
It is reported that the business was inspected in the order of memory, foundry, and system LSI divisions and a strategy for the second half was established.
In particular, this day's meeting was expected to discuss intensive reform plans as it was the first strategic meeting held with Vice Chairman JEON in the midst of Samsung Semiconductor's crisis.

Samsung Electronics' DS division is showing improvement in performance this year due to the recovery of the semiconductor market after recording a deficit of close to 15 trillion won last year, but is struggling as it lags behind in responding to the artificial intelligence (AI) industry.
The memory division has lost leadership in high-bandwidth memory (HBM) to its competitor, SK Hynix. SK Hynix virtually exclusively supplies 4th generation (HBM3) and 5th generation (HBM3E) HBM to NVIDIA, which has a monopoly in the AI semiconductor market, and Micron of the United States has also begun supplying HBM3E, but Samsung Electronics still has not passed Nvidia quality certification.
The foundry (semiconductor consignment production) division is having difficulty catching up with number one, TSMC. The gap is widening as TSMC, with its cutting-edge packaging process, Chip-on-Wafer-On-Substrate (CoWos), sweeps up AI semiconductor orders from major big tech companies.
According to Trend Force, the gap in foundry market share between Samsung Electronics and TSMC widened from 49.9 percentage points (p) in the fourth quarter of last year to 50.7 percentage points in the first quarter of this year.
As the situation of the main business division is not easy, it appears that the meeting intensively discussed the current status of the memory division business, including the progress of NVIDIA HBM quality certification, and the roadmap of the foundry division, including the 2nd generation 3-nano (nm•1 billionth of a meter), which will begin mass production in the second half of the year.

As Vice Chairman JEON emphasized technology-based management, it is expected that Samsung Electronics will begin a new plan to secure competitiveness in the AI semiconductor market starting from this meeting.


3. Fostering K-semiconductors… Financial package worth 18 trillion won to begin in July

A financial support program worth 18 trillion won to grow K-semiconductors will be launched in earnest from July, and tax credits for national strategic technologies will also be extended for three years.
In addition, more than 5 trillion won will be invested in R&D, commercialization, and human resource training by 2027, and exemption from preliminary feasibility studies for infrastructure construction projects such as roads and water, and active cost sharing by the public will be promoted.
The government announced plans to promote comprehensive support for the semiconductor ecosystem at the Economic Relations Ministerial Meeting on the 26th.

This measure specifies the direction of support worth 26 trillion won announced through the 2nd Economic Issue Review Meeting, and is prepared with a focus on increasing the competitiveness of the overall semiconductor ecosystem so that Korea can secure leadership in the global semiconductor competition.
First, in order to smoothly raise investment funds for semiconductor companies, a semiconductor financial support program worth 18.1 trillion won+α will be launched immediately starting next month.
By 2027, up to KRW 2 trillion (KRW 1 trillion in cash + KRW 1 trillion in kind) will be invested in the Korea Development Bank to establish a low-interest loan program of KRW 17 trillion, and loans to semiconductor companies will begin next month.
Compared to general industrial bank loans, large companies receive a preferential interest rate of 0.8~1.0%p, and small and medium-sized companies receive a preferential interest rate of 1.2~1.5%p, which is the lowest interest rate in the market.

In addition, a new semiconductor ecosystem fund of up to 800 billion won will be created by 2027 to expand the semiconductor ecosystem fund to 1.1 trillion won and support corporate scale-up and enlargement.
The current semiconductor ecosystem fund, which will raise 300 billion won by next year, plans to actually make equity investments in small and medium-sized• fabless companies starting next month.
The national strategic technology tax credit application period will be extended by three years and the scope of applicable subjects will also be expanded.
Adding technologies related to advanced semiconductor materials•components•equipment to the national strategic technology is reviewed, and SW rental•purchase fees, research•test facility rental•use fees, etc. are added to the scope of application by revising the Enforcement Decree of the Restriction of Special Taxation Act.

For research personnel who perform both national strategic technology and general R&D, the national strategic technology R&D tax credit rate is planned to be applied by dividing it by the actual research time.
In addition, to strengthen the competitiveness of the overall semiconductor ecosystem, 5 trillion won will be invested intensively from 2025 to 2027 in areas such as R&D•commercialization•human resources training, etc..
It is planned to secure technological competitiveness by quickly completing a large-scale R&D preliminary feasibility study, such as a mini-fab construction project linked to mass production of advanced semiconductors, and to strengthen the basis for verification and commercialization of advanced semiconductors such as AI semiconductors by expanding AI computing infrastructure.

In addition, semiconductor cluster infrastructure such as roads•water•power, etc. will be quickly built, and the public will actively share the costs.
The preliminary feasibility study exemption and government funding support are being promoted for the relocation and expansion of National Route 45, which passes through the Yongin National Industrial Complex site.
The preliminary feasibility study exemption is also being promoted for the integrated double-track pipe construction project that supplies water to the Yongin national and general industrial complex, and the Korea Water Resources Corporation plans to share part of the pipe construction costs.

Step-by-step power supply will also be promoted to ensure stable operation of the Yongin National Industrial Complex.
In the first stage, an LNG power plant within the industrial complex will be built to supply 3GW of electricity, and in the second stage, a long-distance transmission line will be built.
A detailed construction plan for long-distance transmission lines will be established by the end of August, and construction costs will be shared between the public and private sectors.


4. Business leaders such as Samsung Electronics, SK, and LG are heading to the US one after another. … AI‧semiconductor cooperation

SK Group Chairman, CHEY Tae-won went on a business trip to the US on the 22nd. He is visiting the US again two months after meeting with CEO Jensen Huang at Nvidia headquarters in San Jose, US. in April.
Earlier, on the 6th, Chairman CHEY visited Taiwan and met with C.C. Wei, Chairman of the Board of Directors of TSMC, the world's No. 1 foundry (semiconductor consignment production) company, and proposed, "let's open the cornerstone of the AI era that will benefit humanity together.”

Chairman CHEY is expected to discuss AI memory-related collaboration with major big tech companies in Silicon Valley during the trip.
Meetings are also expected with SK Hynix's largest high-bandwidth memory (HBM) customer, Nvidia, as well as fabless (semiconductor design) companies such as AMD and Intel.

Key executives including SK Telecom President YOO Young-sang and SK Hynix President KIM Joo-sun accompanied the Chairman CHEY on this business trip.
SK Group aims to foster an AI ecosystem ranging from semiconductors to services. SK Hynix produces high-bandwidth memory (HBM), which is essential for implementing AI systems, high-capacity DDR5 modules optimized for AI server construction, and enterprise SSD (eSSD), etc.. SK Telecom provides a personal assistant function through its generative AI service ‘Adot’ and has 4 million subscribers.
Previously, Samsung (Samsung Electronics) Chairman LEE Jae-yong and LG Group Chairman KOO Kwang-mo also strengthened their AI-related global network and reviewed future business strategies through a business trip to the US.

Chairman LEE, who returned to Korea on the 13th, shared mid- to long-term vision with global CEOs during a two-week business trip across the East and West US and sought ways to cooperate to lead the future industry.
On the 11th (local time), he was invited to Meta CEO Mark Zuckerberg's home in Palo Alto, western US and had a private meeting. It has been four months since they met at Seungjiwon, Samsung's guesthouse, when CEO Zuckerberg visited Korea last February.
The two discussed ways to cooperate in the future information and communication technology (ICT) industry and software (SW) fields, such as AI, virtual reality (VR), and augmented reality (AR). Chairman LEE also met with Qualcomm President and CEO Cristiano Amon and Amazon CEO Andy Jassy and requested strengthening cooperation in AI semiconductors.

Chairman KOO visited Tennessee and Silicon Valley in the US for four days starting on the 17th to inspect the current status of local business and future preparations in North America and discuss future strategies. Particularly, in Silicon Valley, in addition to LG's business sites, he visited AI startups with world-class technology and looked at the latest technology trends in the AI field.
Chairman KOO met with TenStorent CEO Jim Keller, known as a ‘semiconductor legend,’ and exchanged opinions on the impact of the spread of AI on the semiconductor industry. He visited Figure AI, an AI humanoid robot startup, and looked at the operation of the humanoid robot ‘Figure One’.
A business official said, “with the US interest rate cut expected in September, a full-fledged upward cycle in the AI and semiconductor fields is expected, with companies increasing investment,” adding, “as this is an opportunity to escape the AI chasm (stagnation that occurs between the initial market growth stage and the period of popularization), the number of visits to the US by CEOs aiming to dominate the AI ecosystem is increasing.”



Ⅲ. BATTERY INDUSTRY TREND

1. SK On secures supply chain for up to 100,000 tons of lithium in the US.

Battery manufacturer, SK On announced on the 26th that it signed a memorandum of understanding (MOU) for the supply lithium from ExxonMobil, the largest oil company in the US, on the 24th (local time). This is to respond to the electric vehicle subsidy policy of the US IRA (Inflation Reduction Act), which gives preference to minerals produced locally in North America. Although demand for electric vehicles is temporarily stagnant, the North American market still has high potential, so the strategy is to preemptively build a core mineral supply chain.

ExxonMobil, an oil company, acquired the Arkansas salt lake early last year to ‘de-oil’ and commenced lithium mining in November of that year. The plan is to produce lithium for 1 million electric vehicles per year by 2030. SK On is to receive up to 100,000 tons (equivalent to about 1 million electric vehicles) from ExxonMobil. The amount of supply to be received over the next few years will be determined after the main contract is signed.
SK On manufactures batteries at the ‘Blue Oval SK’ plant, a joint venture with Ford, and at its own plant in Georgia. A joint plant with Hyundai Motors is also under construction in Georgia. SK On also signed a long-term contract for the supply of natural graphite with US company Westwater in February to secure the supply of key minerals from the local area.


2. "Korea’s battery technology is the best in the world”… GM Cadillac strengthens cooperation with LG and POSCO

- Invitation events with executives and employees of POSCO Future M, LG Ensol, etc.
- "Korean partners have contributed greatly to the development of Lyriq"

General Motors (GM)'s luxury brand Cadillac held a special time with Korean companies such as POSCO and LG to celebrate the launch of its first pure electric sports utility vehicle (SUV), Lyriq.
Cadillac announced that it held a special event showcasing Lyriq in front of the POSCO Center on the morning of the 26th, with key executives and employees of GM Korea and POSCO Future M in attendance. Afterwards, executives and officials from LG Energy Solution and LG Chem were invited to Cadillac's exhibition center 'Atelier Lyriq' located in Gangnam-gu, Seoul.

Lyriq is Cadillac's first model to apply GM's next-generation universal architecture, 'ULTIUM', and was completed based on active collaboration with domestic partners with world-class technology in the battery field. This is why Cadillac continued to invite Korean companies to events.
POSCO FutureM's high-nickel NCMA cathod material and low-expansion natural graphite anode material were applied to Lyriq. In addition, POSCO Group's secondary battery materials and steel products, such as POSCO's Giga Steel, ultra-high strength steel, and electrical steel sheets, were also used.
In addition, Lyriq is equipped with LG Energy Solutions' 102 kWh (kilowatt-hour) nickel, cobalt, manganese, and aluminum (NCMA) battery produced at its second plant in Tennessee, US. The driving distance per one charge is 465 km. GM Chairman Mary Barra met with LG Energy Solutions executives in February of this year to discuss ways to collaborate in the battery business. It also signed a contract with LG Chem to supply cathode materials worth 25 trillion won.

President of GM Korea, Hector Visarreal said “Lyriq was developed based on close cooperation with LG-affiliated partners, such as Ultium Cells, a North American joint venture between GM and LG Energy Solutions,” adding “Korean partners such as LG Energy Solutions, LG Chem, POSCO Future M, and POSCO are contributing significantly to Cadillac's redefinition of the standard for luxury EVs around the world through the Lyriq SUV."



Ⅵ. ELECTRIC VEHICLE INDUSTRY TRENDS

1. ‘2024 Busan Mobility Show’ featuring low-end electric vehicles

Busan Mobility Show opened on the 28th. The watching point is ‘entry-level electric vehicles’. Light, compact, and mid-sized electric vehicles such as Hyundai Motor Company’s ‘Casper Electric’, Kia’s ‘EV3’, and BMW’s ‘iX2’ are displayed. Casper, iX2, etc. also presented with ‘’first public release” titles. It is interpreted that the automobile industry is looking for a breakthrough in the electric vehicle chasm (temporary demand stagnation before popularization) with entry-level electric vehicles.
At the ‘2024 Busan Mobility Show’, which held in Busan in two years, seven domestic and foreign car brands, including Hyundai Motors, Kia, Genesis, BMW, Renault Korea, and Oullim Motors, exhibited a total of 59 vehicles. This event, which is being held for the first time after changing its name from ‘Busan International Motor Show’ to ‘Mobility Show’, will be held until July 7 at BEXCO in Busan themed ‘Becoming the Center of the Next Mobility World’.

At the Seoul Mobility Show held in Seoul last year, where electric vehicles were rapidly gaining popularity, electric vehicles worth 100 million won occupied every corner of the exhibition hall. However, at this year's Busan Mobility Show, which faced the chasm, entry-level electric vehicles were deployed forward.
Hyundai Motor Company is introducing the ‘Casper Electric’ for the first time, following its electric vehicle lineup such as IONIQ 5, IONIQ 6, Kona EV, and ST1. Casper Electric is a new electric vehicle launched by Hyundai Motor Company two years after the launch of the IONIQ 6 in 2022. Previously, in Korea, Kia opened the light electric vehicle market with ‘Ray EV’.

Kia will exhibit the EV6 and EV9 along with the EV3, which began contracting this month. By introducing both entry-level and high-end models, Kia is solidifying its image as a leading company in the electric vehicle market. The EV3 exhibition, designed in collaboration between Kia Connect and the National Basketball Association (NBA), is also expected to attract the attention of visitors.

BMW debuts a compact model in Korea for the first time. ‘iX2’, the smallest sports utility vehicle (SUV), will be unveiled for the first time in Korea. The iX2 can be summarized as an urban electric vehicle.
Another reason why the Busan Mobility Show attracts attention is the unveiling of Renault Korea’s new car. The new pure hybrid (HEV) car ‘Aurora 1’ (project name) will be unveiled for the first time in the world. Aurora 1 is the first model of the new hybrid car project ‘Aurora’, which has been in preparation for about two years. It is scheduled to be launched in Korea in the second half of the year and will be produced at Renault Korea's Busan plant.

Oullim Motors, Korea's first handmade sports car manufacturer, is also becoming a hot topic among car enthusiasts. Oullim Motors presents ‘Crzyity 2024’, a new internal combustion engine car for the first time in 12 years.


2. “Hyundai Mobis, 4.5 times increase of electric vehicle patents "

Hyundai Mobis has applied for about 3,000 patents in key future mobility technology areas over the past three years and is strengthening its future vehicle technology competitiveness. Of these, 30% are patents in the field of eco-friendly vehicles, including electric vehicles.

Hyundai Mobis announced on the 25th that it recently published ‘Sustainability Report 2024’ containing these contents. Hyundai Mobis has been publishing the Sustainability Report every year since 2010 to share various achievements in the environment, society, and governance (ESG) field with major stakeholders.
According to this sustainability report, Hyundai Mobis applied for about 3,000 new patents at home and abroad in key future vehicle technology fields such as electrification, autonomous driving, and connectivity over the three years from 2021 to last year. This is approximately 40% of Hyundai Mobis' total number of new patent applications of 8,001 over the past three years.

Approximately 950 patents in the eco-friendly vehicle field including electric vehicles, account for more than 30%. This figure is 4.5 times and twice as large as in 2022 (210 cases) and 2023 (448 cases).
Hyundai Mobis invested approximately 1.6 trillion won in research and development last year. Previously, at the end of last year, establishing an electrification comprehensive research center in Uiwang, Gyeonggi-do, the company is using it as a core base for the development of next-generation electrification technology.
In order to preemptively respond to the expansion of the electric vehicle market, the company is also expanding new production bases at home and abroad. Hyundai Mobis is building a new plant in Spain to supply battery systems (BSA) to Volkswagen in the first half of this year and also a new module factory dedicated to electric vehicles in Ulsan, Korea. Electrification parts production bases being built in North America and Indonesia are preparing for operation in the second half of this year.
A Hyundai Mobis official said, "we have selected eight important environmental, social, and governance (ESG) topics, including climate change response and energy use management" and explained, "in addition, we have expanded the consolidated basis data disclosure scope to include overseas business sites and domestic subsidiaries."

3. More than 6 out of 10 adults “plan to purchase hybrid or electric vehicles in the future”
- Hybrid 39.7%, electric vehicle 24.1% given priority -
- Intention to purchase eco-friendly cars 63.8%
A survey showed that more than 6 out of 10 adults are willing to purchase an eco-friendly vehicle such as a hybrid or electric vehicle.
According to a survey of 1,500 adults conducted by data platform, Open Survey, among those who currently own a car and intend to buy a car in the future (675 people), the largest number, 39.7%, responded that they would first consider a hybrid car as the car they would purchase in the future.

This was followed by gasoline vehicles at 26.7%, electric vehicles at 24.1%, diesel vehicles at 5.9%, and liquefied petroleum gas (LPG) vehicles at 3.1%.
63.8% of respondents said they were considering so-called eco-friendly cars, such as hybrid cars and electric cars, as their next vehicle to purchase.

Looking at those who expressed their intention to purchase a hybrid car by age, those in their 50s accounted for the largest share at 37.3%, followed by those in their 40s at 31.3%. Those in their 20s accounted for only 8.6%.
Additionally, 62.1% of respondents who were willing to purchase an electric vehicle were found to recognize that ‘electric vehicles will contribute to environmental protection.’

However, the perception that it is ‘safe’ and ‘it will be easy to park and charge’ is only 15.9% and 17.4%, respectively, which can be interpreted as concerns about safety.
 

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Korean Industrial Insight No. 4 of AI, Semiconductors, Batteries and Electric vehicles in Chinese