|
|
|
|
 |
|
 |
|
HOME > Resources >
Newsletters |
|
|
| |
|
|
Title |
|
Korean Industrial Insight No. 13 of AI, Semiconductors, Batteries and Electric vehicles |
|
|
Author |
|
KH |
|
Post Date |
|
2025-06-04 |
|
|
Read |
|
531 |
|
Attach File |
|
- |
|
Ⅰ. AI INDUSTRY TRENDS
1. Personal Information Protection Commission Recommends Corrections for AI Digital Textbook over Data Handling Issues
- PIPC’s pre-inspection released
- Lack of transparency on data items and purposes noted
Regarding the handling of user personal information within the 'Artificial Intelligence (AI) Digital Textbook' service, education authorities have received recommendations for correction and improvement from the Personal Information Protection Commission (PIPC).
The PIPC announced on the 15th that it had deliberated and approved the results of the “Pre-inspection of the AI Digital Textbook” during its full commission meeting held on the 14th.
The AI Digital Textbook is a public education service that has been in operation since March of this year. Unlike traditional paper textbooks, it stores individual student learning history in a database and provides personalized content. While this necessitates secure handling of personal information, certain deficiencies in personal data processing were identified during the recent inspection.
According to the inspection results, the Korea Education and Research Information Service (KERIS), the operating body for the AI Digital Textbook integrated portal, was found to have omitted certain details. While required to transparently list the items, purposes, and retention periods of personal information processed in both the personal information processing consent forms and privacy policy for data subjects to be aware, some information was missing. Furthermore, when storing student-specific learning content usage data (National Level Learning Dataset) received from developers in the learning data repository (HUB) within the AI Digital Textbook integrated portal for purposes such as statistics, the specific items and purposes of the personal information being processed were not clearly presented.
In response, the PIPC recommended that KERIS correct its practices to ensure that data subjects are notified without omission of personal information items, purposes, and retention periods through its privacy policy and other means. The commission also directed that the items and purposes for processing the National Level Learning Dataset managed in the integrated database be clarified.
The PIPC further recommended that both KERIS and the developers enhance personal information security measures by obtaining the “Personal information & Information Security Management System (ISMS-P)” certification. Considering the interconnected structure between the integrated portal and the developers' websites, the commission advised devising a plan for joint certification. The PIPC also recommended that the Ministry of Education concretely incorporate compliance requirements of the Personal Information Protection Act into the AI Digital Textbook validation criteria and guidelines, and establish a post-inspection system. Additionally, the commission advised ensuring that personal information processed during the operation of the AI Digital Textbook service is handled securely based on clear legal grounds and that the rights of data subjects are effectively protected.
2. OpenAI Makes Official Entry into South Korea with Entity Establishment
- OpenAI opens Seoul office, hires for broader AI infrastructure & model collaboration with authorities and companies
- Data center establishment plan in Korea undecided; CSO Jason Kwon states, “Open to various collaborations.”
OpenAI announced its plan on the 26th to officially enter the South Korean market by establishing an office in Seoul. This move is aimed at expanding cooperation with domestic AI authorities and companies, including the development of artificial intelligence (AI) infrastructure.
The company recently unveiled “OpenAI for Countries,” an overseas expansion program for its large-scale AI infrastructure initiative, “Project Stargate,” which includes the construction of a 5GW data center cluster in Abu Dhabi, United Arab Emirates.
Jason Kwon, Chief Strategy Officer (CSO) of OpenAI, met with domestic media at the Four Seasons Hotel in Jongno-gu, Seoul and announced the official establishment of a subsidiary in Korea, stating that the company will launch full-scale domestic operations by opening its first office in Seoul within the next few months. While the location of the office has not been finalized, hiring will soon begin for personnel who will promote cooperation with key stakeholders, including companies and the government.
OpenAI currently operates branches in Tokyo, Japan, and Singapore within the Asia region. Globally, the company has expanded to 11 cities over the past year, including London (UK), Dublin (Ireland), Brussels (Belgium), and Paris (France).
Prior to its official entry into Korea, the company had already announced financial cooperation with the Korea Development Bank (KDB) regarding domestic data center development and support for local startups. It also formed partnerships with Kakao [035720], Krafton [259960], and SK Telecom concerning the adoption of advanced AI technology.
OpenAI explained that through its entry into Korea, it plans to strengthen cooperation with Korean policymakers, businesses, developers, and researchers, promote the development of truly “Korean-style AI,” and support the broad and responsible sharing of AI benefits.
However, OpenAI did not disclose specific plans regarding the construction of a data center in Korea.
CSO Kwon explained, "We have significant interest in establishing AI infrastructure, but we do not have information on the scale if a data center were to be built here (in Korea)." He added, "However, we are cooperating with data center providers like Oracle and Microsoft on matters such as domestic data storage."
He further elaborated, "We have formed a partnership with the UAE where we receive sponsorship from the local government and companies, and OpenAI provides AI models that can be integrated and utilized within their infrastructure. We have great interest in pursuing similar collaborations in Korea."
When asked whether they were planning cooperation as part of the Korean government's National AI Computing Center project, he replied, "We are ready to cooperate whenever necessary, but we are not committed to adopting only a specific method."
OpenAI also emphasized the rapid adoption of its AI tools, such as ChatGPT, in South Korea, citing the release of its latest data.
Weekly active users of OpenAI products, including ChatGPT, exceed 500 million globally, and the company has over 2 million paid enterprise customers.
South Korea holds the second-highest number of paid ChatGPT subscribers globally, following the United States. The country has seen a more than 4.5 times increase in weekly active ChatGPT users over the past year and is ranked among the top 10 countries worldwide by user count.
Furthermore, the number of developers utilizing the OpenAI API platform also ranks among the top 10 globally, and the number of users for paid enterprise services is included in the top 5 countries worldwide.
OpenAI stated that based on its competitive technology industry, a culture of innovation encompassing businesses and academia, and the high level of interest among the general public in utilizing AI tools in daily life, South Korea is one of the countries with the most active AI adoption globally.
OpenAI CSO Jason Kwon stated, "South Korea possesses a full-stack ecosystem encompassing all areas of AI, from semiconductors to software, and is an AI-leading nation where diverse generations, from students to the elderly, regularly utilize AI in their daily lives."
3. Ministry of Industry Expands AI Autonomous Manufacturing to AI Factory, Includes Humanoid Support
- Over 25 projects to be selected this year, receiving up to KRW 10 billion each
- Selection in June–July; aims to support over 100 projects annually by 2030, up from 26 last year
The Ministry of Trade, Industry and Energy announced on the 26th that it will rename and expand the AI Autonomous Manufacturing Project, an initiative aimed at assisting the utilization of artificial intelligence (AI) in manufacturing sites, and operate it as the AI Factory Project.
The AI Autonomous Manufacturing Project is a program supporting companies that leverage AI technology in manufacturing operations, based on the 'AI Autonomous Manufacturing Strategy 1.0' announced in May of last year.
Last year, the Ministry of Trade, Industry and Energy designated 26 AI application initiatives undertaken by leading domestic companies, including Hyundai Motor's AI-powered multi-product flexible production system in South Korea, as 'AI Autonomous Manufacturing Leading Projects,' initiating support valued at KRW 190 billion.
The maximum support available per project stands at KRW 10 billion.
Marking the second year of the project, the Ministry of Trade, Industry and Energy reported that a preliminary review of corporate demand surveys conducted prior to this year's selection process revealed a significant increase in interest, with 519 companies responding to the survey—more than double the number from last year (213).
Considering the urgency of adopting AI in manufacturing sites and the high level of demand from the industry, the Ministry plans to expand and restructure the existing AI Autonomous Manufacturing Project into the AI Factory Project, while also pursuing quantitative growth and qualitative advancement of the program.
Consequently, the number of designated leading projects will be expanded from 26 last year to over 100 annually by 2030.
The number of leading projects to be selected this year will also be expanded from the initially planned target of around 25.
The scope of supported business sectors will also be broadened. While support in the first year of the project was primarily focused on large-scale manufacturing sites such as automotive and shipbuilding, starting this year, support will also be extended to small-scale manufacturing sites and consumer-utilizing sectors including franchises, distribution, and logistics.
Furthermore, to facilitate the systematic and vertical expansion of AI within a single supply chain, from large corporations down to first- to third-tier vendors (mid-sized and small enterprises), support for collaborative projects involving large, medium, and small companies will be selected separately.
Also, centered around the K-Humanoid Alliance launched in April, projects demonstrating the full-scale deployment of humanoids at manufacturing sites have also been added to the list of supported initiatives.
The Ministry will issue announcements for this year's projects by the end of this month to early next month, with the final selection of supported initiatives scheduled for June to July.
An official from the Ministry stated, "This year, we received more than double the corporate demand compared to last year, and prominent manufacturing companies that did not participate last year have also expressed new interest, indicating anticipated fiercer competition."
Ⅱ. SEMICONDUCTOR INDUSTRY TRENDS
1. South Korea Commences Full-Scale Water Supply Project for Yongin Semiconductor Cluster
The South Korean government is set to officially commence the water supply project for the Yongin Semiconductor Cluster in Gyeonggi Province.
The Ministry of Environment and Korea Water Resources Corporation (K-Water) announced on the 16th that they have begun basic and detailed design for the first phase of the 'Yongin Semiconductor Industrial Complex Integrated Water Supply Project'.
The Yongin Semiconductor Industrial Complex Integrated Water Supply Project is an infrastructure development initiative aimed at ensuring a stable supply of industrial water to the world's largest Yongin Semiconductor Cluster, which includes both the National Industrial Complex (Samsung Electronics) and the General Industrial Complex (SK Hynix, etc.).
The project targets the supply of 1.072 million cubic meters of water per day by 2034, with a total project cost of approximately KRW 2.2 trillion. This initiative will be executed in two phases to meet water demand: Phase 1 (310,000 m³/day by 2031) and Phase 2 (762,000 m³/day by 2035). The current commencement of design pertains to the Phase 1 project.
The Phase 1 project involves the construction of a dedicated 46.9km pipeline from Paldang Dam to Yongin and one new pressure boosting station. It will proceed by incorporating the optimal route after undergoing procedures such as initial concept planning (June 2024) and a feasibility study (July 2024–February 2025).
Following a design period of approximately one year and six months from today until November next year, and subsequent construction until 2030, the supply of 310,000 m³ of water per day is scheduled to commence in January 2031.
Kim Hyo-jung, Director General of Water Utilization Policy at the Ministry of Environment, stated, "Providing a sufficient supply of industrial water in a timely manner is a core national responsibility." She added, "We will closely coordinate with relevant organizations and provide maximum support to ensure the project is pushed forward with speed."
2. Korea Customs Service Classifies Electromagnetic Shielding Deposition Equipment as “Semiconductor Assembly Machine”
The Korea Customs Service announced that it decided on the tariff classification for a total of 15 items at the second Tariff Classification Committee meeting in 2025 and published the revised amendment to the classification notice for import/export goods, reflecting these changes, in the Official Gazette on the 26th.
Firstly, regarding the equipment used to deposit electromagnetic shielding film on semiconductor packages, the committee deliberated on whether it falls under △machines for the assembly of semiconductors (Code 8486, basic tariff 0%) or △other machinery not elsewhere specified–coating machines (Code 8479, basic tariff 8%).
The shielding process is a process that reduces errors by preventing electromagnetic interference through the deposition of an electromagnetic shielding film on semiconductors. Following the deposition of the electromagnetic shielding film using the subject equipment, visual inspection and performance tests are performed.
Following deliberation, incorporating opinions from the industry and experts, it was determined that the shielding film deposition process can be considered part of the semiconductor assembly process, as it affects the operation and function of the semiconductor. Therefore, classifying the item performing this process under HS Code 8486 for machines used in semiconductor assembly was regarded appropriate.
This decision is expected to serve as a criterion for determining whether an item qualifies as “semiconductor assembly equipment” under the tariff schedule and contribute to enhancing the competitiveness of the domestic semiconductor manufacturing industry by alleviating tariff burdens amidst challenging external trade conditions.
Additionally, instruments used to measure distances utilizing lasers to targets in places like golf courses were classified under HS Code 9015 as distance measuring instruments (concessional tariff 0%), rather than HS Code 9506 as articles for golf (basic tariff 8%).
It was determined that this item is a product that can be used in various fields beyond golf, including hunting, surveying, and lifesaving, making classification as a distance measuring instrument more appropriate than as a golf article, under which items like golf clubs are classified.
This decision is expected to establish a criterion for distinguishing various sports equipment and measuring instruments, including golf articles, thereby helping related companies operate in a more stable environment.
Besides these, tariff classifications for a total of 15 items were decided, including chicken stock tubes (HS Code 2103, basic tariff 8%). Detailed information can be found in the Official Gazette and on the Korea Customs Service website.
3. First-Ever Emergency Arrest in S. Korea Over Attempted Tech Leak to China
- “World’s Best” semiconductor capillary technology nearly stolen
A man in his 40s, identified as Mr. A, who attempted to transfer 'capillary' manufacturing technology—considered a core technology in the semiconductor packaging process—to China, was emergency arrested just before his departure. This marks the first instance in South Korea where judicial authorities have made an emergency arrest for a technology leak crime. This action is being interpreted as reflecting the growing recognition of industrial technology protection as an urgent national priority.
According to legal and semiconductor industry sources on the 26th, Mr. A was apprehended by the police while attempting to leak 'capillary' manufacturing technology, which he had acquired while working at a domestic semiconductor component company, Company B, to China. A capillary is essential equipment required in the 'packaging' process, one of the final steps in semiconductor assembly. It is used in “wire bonding,” an operation that connects semiconductor chips and substrates with fine metal wires. The capillary is the tool used at this stage for precisely connecting the chip and lead terminals with wires. Major domestic semiconductor companies, including Samsung Electronics and SK Hynix, are reportedly using this company's capillaries to produce AI semiconductors such as High Bandwidth Memory (HBM), which are high-performance semiconductors. Company B is known for producing capillaries of the world's highest standard.
The Industrial Technology Security Investigation Team of the Seoul Metropolitan Police Agency recently emergency arrested Mr. A at Gimpo Airport just before his attempted departure for China with this technology. This is considered the first instance of securing the custody of a suspect accused of technology leakage through an emergency arrest. Emergency arrest is stipulated in the Criminal Procedure Act, allowing prosecutors or police to apprehend a suspect of a serious crime without a warrant issued by the court if there is a risk of evidence destruction or flee. The act of leaking domestic technology abroad is also classified as a serious crime punishable by up to 10 years in prison or a fine of up to KRW 100 million under the ‘unfair competition prevention and trade secret protection act,' making it subject to emergency arrest. However, there has been a strong tendency for authorities to take a more passive approach in past technology leakage cases.
This time, however, was different. The police, who had been closely monitoring Mr. A's activities, received intelligence that he had gone to the airport to depart for China. They immediately mobilized after requesting cooperation from relevant agencies, including the National Intelligence Service, airport police, and the airline. It is reported that while the police were coming, Asiana Airlines, the carrier for Mr. A's flight, delayed the takeoff time by approximately 8 minutes, citing various reasons. Subsequently, Mr. A was instructed to exit the aircraft via an in-flight announcement, and the police proceeded with the emergency arrest. The police took Mr. A to the police station to investigate the circumstances of his attempted departure and the details of the alleged technology leakage. Three days later, they applied for and obtained an arrest warrant from the Seoul Central District Court. After conducting further investigations for approximately two more weeks, the police transferred Mr. A to the prosecution in custody.
Ⅲ. BATTERY INDUSTRY TREND
1. Impact of U.S. Tariff Policy Uncertainty: K-Battery Makers Hit Record Low Utilization Rates
- LG Energy Solution at 51.1%, down 6.7% from year-end
- SK On maintains 40% range; Samsung SDI small battery utilization at 32%
Due to a prolonged electric vehicle (EV) "chasm" (temporary slowdown in demand), the three major South Korean battery manufacturers (LG Energy Solution, Samsung SDI, and SK On) have recorded their lowest factory utilization rates. LG Energy Solution's utilization rate dropped to the low 50s%, while SK On has remained in the 40s% since last year.
According to the quarterly reports released by each company on the 16th, LG Energy Solution's factory utilization rate in the first quarter of this year was 51.1%, a decrease of 6.7 percentage points compared to the end of the previous year (57.8%).
SK On's average utilization rate for the first quarter was recorded at 43.6%. The average utilization rate disclosed in last year's business report was 43.8%.
Samsung SDI does not separately disclose the utilization rate for its medium to large-sized batteries supplied for EVs. However, the average utilization rate for small batteries was 32%, approximately half of last year's average utilization rate (58%).
The utilization rates of the three battery companies began to decline in 2023 with the onset of the EV chasm. LG Energy Solution's utilization rate, which was 73.6% in 2022, dropped to 69.3% in 2023 and significantly fell to 57.8% last year.
SK On's rate rose from 86.8% in 2022 to 87.7% in 2023 but was halved to 43.8% last year. Samsung SDI's average utilization rate saw a sharp decline from 84% in 2022 to 76% in 2023 and 58% in 2024.
In addition to the EV chasm, the tariff policies of the Trump administration have also had an impact. As uncertainty increased, automakers adjusted their production pace.
An official from the battery industry explained, "Due to external volatility like tariffs and demand uncertainty, customers are conservatively managing inventory and adjusting the pace of EV production. As a result of the overall decrease in demand, low utilization rates are continuing."
If the current level is maintained, the three major Korean battery companies are expected to record their lowest-ever utilization rates this year. Consequently, the companies appear to be scaling back infrastructure investments and focusing on research and development.
Previously, at the Q1 earnings call, LG Energy Solution stated, "Considering the utilization rate and the rapidly increasing infrastructure investment costs recently, we do not plan to build new factories for the time being."
2. LG Energy Solution, GM Target China’s LFP Market with LMR Batteries
The global electric vehicle battery market is entering a new phase. With the announcement of plans for commercialization in 2028 of the lithium manganese rich (LMR) prismatic battery, jointly developed by U.S. General Motors (GM) and LG Energy Solution (hereafter LGES), the beginning to a shift in the market landscape has begun.
Both companies plan to mass-produce LMR batteries in the vacant spaces of their joint venture, Ultium Cells' plants in Ohio and Tennessee, USA, for installation in GM's electric truck Chevrolet Silverado and the large electric SUV Escalade IQ. Pilot production is scheduled to take place at LGES facilities by the end of 2027.
The most significant feature of LMR batteries is the substantial increase in manganese content to 60-65%, which dramatically reduces the usage of costly nickel and cobalt. This enables securing cost competitiveness while achieving 33% higher energy density compared to lithium iron phosphate (LFP) batteries.
GM and LGES have overcome the chronic issues of lifespan degradation and voltage drop in conventional LMR batteries through proprietary coating technology, particle design, and process optimization, achieving a lifespan similar to that of high-nickel batteries.
According to investment bank UBS, the projected share of LFP batteries in the global automotive battery market by 2030 has been revised upwards from the previous 15% to a recent 40%, indicating the intensifying offensive from Chinese manufacturers. The emergence of LMR batteries in this environment is expected to offer a new point of balance between China's LFP and Korea's NCM.
The LMR battery currently under development targets a driving range exceeding 644 km. Due to its high manganese content, it has a lower risk of overheating compared to NCM batteries, ensuring excellent safety. It also offers advantages in recycling efficiency. While LFP is based on iron (Fe), which has low recovery value, LMR contains valuable rare metals like nickel, lithium, and manganese, holding higher value from a circular economy perspective.
LG Energy Solution expresses confidence in its technological superiority, currently holding over 200 LMR-related patents worldwide. Seo Won-jun, Vice President at LGES, stated, "This is the result of decades of research and technology investment," adding his anticipation, "GM's future trucks powered by this technology are a powerful example demonstrating our joint commitment to providing consumers with diverse EV options."
3. KRW 40 trillion ESS Market Opens in S. Korea: Will It Be a Breakthrough for K-Batteries Amid EV Slump?
- Government-led ESS market takes off; K-batteries’ “survival strategy” activated amidst China’s pursuit
The domestic secondary battery industry, which has been affected by the slowdown in the electric vehicle market, is facing a new breakthrough. As the government announced to open a battery Energy Storage System (ESS) market worth a total of KRW 40 trillion by 2038, ESS is rapidly emerging as a key means for power grid stability and the expansion of renewable energy.
However, the path ahead for domestic battery companies is not smooth. This is due to the fact that Chinese battery manufacturers, who dominate 90% of the global ESS market and prioritize cost-effectiveness, are signaling their full-scale entry into the South Korean market. Amidst rising concerns that the Korean market could be filled with Chinese products, similar to what occurred in the solar panel market, the government and industry share a sense of urgency to prevent “the next solar panel crisis” this time.
The Ministry of Trade, Industry and Energy issued a tender notice on the 22nd for a project to introduce 540MW of battery ESS nationwide. This project aims to complete facility construction by 2026 and then operate under a structure where power is charged or supplied according to the Korea Power Exchange's dispatch instructions at a fixed price for 15 years. It involves a total facility capacity of 3,240MWh capable of charging and discharging for up to 6 hours, with investment costs expected to reach approximately KRW 1 trillion.
This marks the first time a large-scale ESS system is being introduced nationwide. The government plans to leverage this as a starting point for implementing a systematic ESS expansion strategy going forward. As the adoption of renewable energy sources like solar and wind power increases, intensifying the challenge of inconsistent power output, ESS is gaining prominence as critical infrastructure to enhance grid flexibility.
Traditional power generation methods such as nuclear power and LNG adjusted power supply and demand in the past. However, amidst the expansion of renewable energy, where generation fluctuates significantly depending on weather and time of day, ESS is becoming an indispensable entity. Amidst recurring instances of power surpluses and shortages, large-capacity ESS functions as a 'buffer' for the power grid by storing power to align with supply timing.
The rapid growth of the ESS market offers new opportunities for Korean battery companies, while simultaneously representing a new competitive landscape. Currently, Chinese companies dominate the global ESS market, with CATL notably leading the standardization of ESS batteries by leveraging lithium iron phosphate (LFP) technology.
LFP batteries are evaluated as suitable for ESS due to their low cost and reduced fire risk. CATL is further solidifying its market leadership by incorporating advanced technology to increase energy density. Indeed, CATL held a dominant 37.9% share of global battery usage as of 2023, ranking first. LG Energy Solution remained in third place with 10.8%.
Furthermore, CATL established a Korean subsidiary in January of this year, declaring its entry into not only the EV market but also the ESS market. This suggests a high possibility of expansion of Chinese-made batteries in the domestic ESS market.
In response, the government has designated contribution to domestic industry as a key evaluation criterion in battery ESS tenders, in addition to price. The Ministry of Trade, Industry and Energy allocated 24 out of a total of 100 points in the evaluation of ESS operators to industrial contribution items such as job creation and utilization of domestic technology. Not only finished battery products but also the origin and procurement plans for core components like cathode materials, anode materials, electrolytes, and inverters are included in the evaluation.
Ⅵ. ELECTRIC VEHICLE INDUSTRY TRENDS
1. BMW Korea Achieves Highest Monthly EV Sales in April, Aims for Market Leadership
- BMW records 723 EV sales in April
- First time exceeding monthly sales of 700 this year
- EV test drive membership launched this month
BMW Korea surpassed 700 electric vehicle sales in April, recording the highest monthly sales figure this year.
By significantly boosting its EV sales, which were around 200 units in January this year, BMW Korea is capturing leadership in the imported EV market.
Notably, BMW Korea is further expanding its engagement with EV customers by launching the “BMW BEV Membership” test drive program this month. This is expected to result in a corresponding increase in EV sales.
BMW Korea's EV sales in April reached 723 units, exceeding monthly sales of 700 for the first time this year. This represents a more than threefold surge compared to January (233 units).
Above all, analysis suggests that the introduction of a diverse range of EV models in the domestic market has contributed to the increase in sales.
Currently, BMW Korea sells various EV models in the domestic market, including the compact electric SUV models iX1 and iX2, as well as the mid-size electric sedan i4, near-large electric sedan i5, large electric SUV iX, and large electric sedan i7. By diversifying its EV lineup, the company has expanded customer options.
Furthermore, BMW Korea introduced the BMW BEV Membership for the first time this year, commemorating its 30th anniversary.
This membership is a program offering test drives of four BMW EV models—i5, i4, iX1, and iX2—to customers who purchased new BMW vehicles on or after the 1st of this month. The strategic intent is to increase sales volume by providing more customers with the opportunity to experience electric vehicles.
Additionally, BMW Korea is aiming to enhance service quality by establishing the “BMW BEV Community” within the BMW application, specifically for EV customers.
2. Hyundai Motor Establishes First ‘Middle East Production Base’ in Saudi Arabia: 50,000-Unit Annual EV& ICE Plant
- Sovereign wealth fund holds 70%, operation expected Q4 next year
- Expand market share with EV transition
Hyundai Motor is partnering with Saudi Arabia's Public Investment Fund (PIF) to establish its first production base in the Middle East region. This initiative aims to secure a foundation to become a leading brand in Saudi Arabia, the largest automotive market in the Middle East, and accelerate efforts to capture the rapidly growing local market in the future.
Hyundai Motor announced on the 15th that it held a groundbreaking ceremony for the “Hyundai Motor Manufacturing Middle East (HMMME)” plant on the 14th (local time) at the King Salman Automotive Cluster in Saudi Arabia. The ceremony was attended by key figures including Jae Hoon Chang, President and CEO of Hyundai Motor Group, Bandar Ibrahim Al-Khorayef, Saudi Minister of Industry and Mineral Resources, and Yazeed A. Al-Humied, Deputy Governor and Head of MENA Investments at Saudi Arabia's Public Investment Fund. HMMME is a joint production corporation with Hyundai Motor holding a 30% stake and Saudi PIF holding 70%. The King Salman Automotive Cluster is a newly established manufacturing hub in King Abdullah Economic City (KAEC), aiming to foster the development of Saudi Arabia's automotive industry. Hyundai Motor plans to construct the HMMME plant there, targeting operation in the fourth quarter of next year, with an annual production capacity of 50,000 units, capable of mixed production of electric vehicles and internal combustion engine vehicles.
Hyundai Motor plans to actively respond to the accelerating EV transition trend in the Middle East and increase its market share through mixed EV production at the HMMME plant.
According to the automotive industry, car sales in the Middle East market peaked at 2.78 million units in 2020, then decreased to 2.30 million in 2021 due to the impact of COVID-19, and are now showing a trend of recovery. Sales are expected to exceed 3 million units around 2030. Notably, Saudi Arabia is a key country, accounting for about 34% of the total Middle East automotive market. Last year, out of 2.49 million cars sold in the Middle East, 840,000 were sold in Saudi Arabia.
Hyundai Motor had already announced a mid-to-long-term goal at the end of 2023 to increase its share of EV sales in the Middle East to over 15% by 2032.
In his congratulatory remarks, Vice President Chang stated, "This groundbreaking ceremony signifies the start of a new era for both Hyundai Motor and Saudi Arabia," adding, "We hope HMMME can contribute to Saudi Arabia's 'Vision 2030' by fostering local talent with mobility technology development capabilities, among other contributions." Vision 2030 is a national development project promoted by the Saudi government to diversify its traditional energy-centered industrial structure towards manufacturing, hydrogen energy, and other sectors. Its core goals include reducing reliance on oil by 2030, producing 500,000 EVs annually, and converting over 30% of cars in the capital Riyadh to EVs by 2030.
3. China’s BYD “Atto 3”: The Secret Behind Topping Imported EV Sales in April
- Impressive 12.8-inch rotating display
- Aerodynamic design for swift driving
- “Late 20 million won” range price competitiveness with subsidies
China's BYD compact SUV, the “Atto 3,” which began customer deliveries in the South Korean market last month, is showing an unusual initial surge in popularity, seemingly unaffected by the term "EV chasm (temporary stagnation in demand).”
According to the Korea Automobile Importers & Distributors Association (KAIDA), the Atto 3 sold 543 units last month, its first month entering the domestic market, securing the top spot among imported electric vehicles. It surpassed both the “traditional powerhouse” Tesla's mid-size SUV “Model Y Long Range” (533 units, 2nd place) and mid-size sedan “Model 3 Long Range” (350 units, 3rd place). Notably, it reached the top position with sales volume accumulated over just 17 days, from the start of deliveries on the 14th of last month to the 30th. Even considering that Tesla's “Model Y” sales were relatively low ahead of an anticipated partial model update, this is a remarkable outcome.
The Atto 3 is a 5-seater. The interior did not feel cramped. A panoramic sunroof enhanced the sense of openness, and the trunk (cargo space) was sufficiently ample when the rear seats were folded down.
Its unique design also contributes to its appeal. The concept is described as fitness and music, intended to emphasize dynamism and rhythm, which became understandable upon closer observation. Features such as the center armrest inspired by a fitness club treadmill, air vents drawing inspiration from dumbbells, door grips resembling hand grippers, and door pockets that appear as if guitar strings have been directly placed, all provide a distinct enjoyment.
The highlight is the 12.8-inch rotating display. When the button is pressed, it rotates 90 degrees with a “whirring” sound, which widened the eyes of the person who accompanied me in shock. This functionality allows the display to adjust according to the situation, placing vertically for navigation use and horizontally for video viewing.
A harmony of tradition and innovation was sought by retaining an appropriate degree of analog sensibility. Buttons allowing intuitive operation of various functions such as 3D surround view, phone calls, voice recognition, cruise control, and display rotation are positioned on the steering wheel, facilitating easy control. The 5-inch cluster (instrument panel) located in the center of the driver's seat quickly and intuitively conveys key vehicle information, including speed, energy efficiency, driving range, and driving mode, to the driver via a color display.
The aerodynamic design, which lowered the drag coefficient to 0.29 Cd, and the car's low center of gravity, contributed to stable and smooth driving even in rainy conditions. The characteristic acceleration unique to EVs could also be experienced in the Atto 3. The time taken to accelerate from a standstill to 100 km/h was 7.3 seconds.
BYD's greatest strength lies in its price competitiveness, which is significantly bolstered by the vertical integration of components, including batteries, and supportive government policies.
The Atto 3 is priced starting from KRW 31.5 million. The higher tier Plus model begins at KRW 33.3 million. While its output (150 kW) and Ministry of Environment certified single charge driving range (321 km) are comparable to the Kia EV3 Standard model (350 km), its price point is approximately 8 million won lower. Furthermore, it presents a price difference of about 20 million won when compared to models such as the Tesla Model Y. It is reported that with the subsidies, the Atto 3 base model can potentially be acquired in some local government regions for a price in the late KRW 20 million range. This shocked my companion once again.
Ⅴ. BIO INDUSTRY TRENDS
1. KoreaBIO to Foster Talent for “Bio-Data Industry”
The Korea Biotechnology Industry Organization (KoreaBIO) is to foster talent to lead the bio-data industry over the next five years through the 'Bio-Data Industry Professional Training Program'. This initiative is part of the Industry Innovation Talent Growth Support Project, supported by the Ministry of Trade, Industry and Energy and managed by the Korea Institute for Advancement of Technology (KIAT).
The organization held a kick-off meeting on the 13th at the JW Marriott Dongdaemun Square Seoul to discuss this year's project implementation plan and strategies for achieving goals.
This program aims to cultivate and supply high-level core personnel in response to the global shift in the bio paradigm towards data-driven research. With KoreaBIO serving as the lead institution, the project plans to train 432 industry-tailored professionals across three fields: Bioinformatics (Hanyang University ERICA), Bio Data Science (Korea University, Pusan National University), and AI New Drug Development (Seoul National University).
In addition, efforts will be made to cultivate practical talent through industry-academia collaboration. This includes developing and improving curricula that reflect on-site demand, operating practice-oriented short training courses to enhance data analysis capabilities, and identifying “industry-academia projects” aimed at solving technical challenges in the industrial field. Active support will also be provided to facilitate employment linkages between students and companies through initiatives such as recruitment fairs for bio companies and mentoring programs that increase the participation of consortium companies involved in industry-academia projects.
The Head of Industry Support at KoreaBIO stated, "As the paradigm of the bio-industry is shifting towards R&D based on biodata and AI-based new drug development, now is a crucial time to foster high-level personnel capable of utilizing data." He added, "We will endeavor to cultivate high-level professionals with the practical competencies wanted by the industry."
2. Samsung Biologics’ and Lotte Biologics’ ADC Contract Manufacturing Businesses
Domestic bio companies are actively venturing into the ADC (Antibody-Drug Conjugate) CDMO (Contract Development and Manufacturing Organization) business. With the anticipated high growth of the ADC market in the future, demand for CDMO is also expected to increase.
Lotte Biologics signed a production contract for ADC candidates for clinical trials with a Asia-based biotech company last month.
Lotte Biologics signed a manufacturing contract for an investigational ADC candidate substance with an Asia-based biotech company last month.
With this contract, Lotte Biologics plans to fully operate its ADC production facility. Lotte Biologics has been expanding its ADC production facility at the Bio Campus in Syracuse, New York, USA, since 2023, investing approximately $100 million (about KRW 142.4 billion).
The facility is cGMP (Current Good Manufacturing Practice) approved and is equipped with an integrated production and purification line, with a maximum of 1,000-liter (L) conjugation reactors. It provides not only its own Quality Control (QC) testing but also characterization analysis services. It is capable of handling antibody pretreatment processes to automated sterile filling of raw materials.
Samsung Biologics, a leader in the domestic CDMO industry, is also exploring various ADC business areas, including CDO (Contract Development), Conjugation CMO (Contract Manufacturing Organization), and DP (Drug Product). It is reportedly in discussions with several clients, including major global pharmaceutical companies, regarding ADC product contracts.
Samsung Biologics completed the construction of a dedicated ADC manufacturing facility in December last year and commenced operations in the first quarter of this year. Located in Songdo International City, Incheon, the facility is designed with a four-story structure and is equipped with a 500-liter conjugation reactor and one purification line. There are also plans to establish an ADC Drug Product (DP) production line targeting the first quarter of 2027.
In January, Samsung Biologics also signed a partnership agreement with LegoChem Biosciences for ADC business cooperation. The two companies plan to collaborate on more than three ADC projects this year. These projects will also be conducted at Samsung Biologics' dedicated ADC manufacturing facility. Additionally, Samsung Biologics is continuing its investments in ADC biotech companies through the Life Science Fund, established jointly with Samsung C&T, Samsung Bioepis, and Samsung Venture Investment.
ADC is a drug that selectively treats cancer cells by conjugating a drug to an antibody. It is expected to be more effective than conventional anticancer drugs while having fewer side effects. With its efficacy recently proven, it is being used to treat blood cancers, breast cancer, urothelial carcinoma, ovarian cancer, and other types of cancer.
According to the Korea Biomedicine Industry Association (KoBIA), the global ADC market is projected to reach approximately $28 billion (about KRW 40 trillion) by 2028. Global pharmaceutical companies such as Pfizer and AstraZeneca are also strengthening their ADC pipelines and focusing on securing technology. This is precisely why domestic companies are entering the ADC CDMO market. As drug development increases, the demand for CDMO is also highly likely to rise.
A Lotte Biologics official stated, "We plan to strengthen our position within the ADC therapeutics market," adding, "Based on this order, we will explore opportunities to secure additional clients while also accelerating the expansion of partnerships to provide one-stop ADC services."
|
|
|
|
|
Prev |
|
KIPO held a policy meeting with the council of the director of a national university industry-academic cooperation group and the chief of a research office.(News Letter No. 554)
|
|
|
Next |
|
Korean Industrial Insight No.15 of AI, Semiconductors, Batteries and Electric vehicles in Chinese
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
