[The Editors' Verdict] Huawei's 7nm: The Emergence of a 'Gray Rhino'

If China Weaponizes Automotive Chips and Resources,
South Korea Will Become the Top Target
Semiconductor Industry Must Be Strengthened as a Shield

China, which shook the global financial markets with a real estate crisis, has once again delivered a shock. This time, it is through the new smartphone released by Huawei. At present, it is not clear exactly how Huawei managed to overcome the United States' stringent sanctions. However, it is certain that the US sanctions have ironically proven Huawei's capabilities. It has also undoubtedly boosted confidence within China.

Some voices have downplayed this product, claiming it is the best China can produce under US sanctions, but this is a misjudgment.

Currently, the global semiconductor market is dominated by legacy products made using processes of 28nm (one-billionth of a meter) or larger, an area where China holds strengths. These legacy products are widely used in smartphones, automobiles, military weapons, and account for 75% of the total semiconductor market. China's counter-strategy against the US also focuses on strengthening the market dominance of legacy products. If China retaliates in the second US-China semiconductor war, ignited by Huawei, using legacy products, it could lead to situations similar to the semiconductor chip shortages during the COVID-19 pandemic that caused automobile manufacturers to halt operations at any time.

Particularly, attention should be paid to China's strengthening of the automotive semiconductor market. In fact, China's influence in the semiconductor market centered on advanced semiconductors found in smartphones and servers is not significant. However, the story could change when it comes to the autonomous electric vehicle sector, considered a future industry. China is the world's largest automobile producer and consumer. If China flips the board by shifting the second US-China semiconductor hegemony war to automotive chips, it will be difficult to predict the end of this second semiconductor war.

Exterior view of the Huawei store located in Shilla Toon, Beijing, China. (Photo by Kim Hyun-jung, Beijing correspondent)

The term 'gray rhino' refers to situations where risks are foreseeable but proper preparations are not made, leading to harm. China's semiconductor rise, reignited by Huawei, could become a gray rhino for us. If China pursues a strategy focusing on legacy and automotive chip semiconductors alongside weaponizing resources to target US allies, it is obvious that South Korea will be the top target. If pushed into such a situation, will the US, a semiconductor ally, step in? The 1986 US-Japan semiconductor agreement offers some insight. That agreement shows that the US made no concessions or alliances when it came to advanced technology issues. It is highly likely the same will apply this time.

At times like this, we must focus even more on our already strong semiconductor industry. With the whole world engaged in a 'money war' over semiconductor dominance, if it is socially and emotionally difficult to respond with radical subsidies, we need to build the best infrastructure and environment. If the Yongin Semiconductor National Complex, scheduled to begin construction in 2026, is developed with cutting-edge infrastructure, education, living, and cultural environments incomparable to Silicon Valley in the US or the Suzhou Industrial Park in China, it will be easier to attract talent and improve production efficiency.

We also need to revise our talent acquisition strategy. China has 52,000 semiconductor design engineers, incomparable to South Korea's 7,000. The future talent pool is also abundant. China produces 11.58 million university graduates annually, half of whom are in science and engineering fields. In contrast, South Korea's semiconductor-specialized universities are hindered by various regulations and cannot progress at their own pace.

The political sphere must stop stalling by repeating the broken record of 'semiconductor conglomerate privileges.' Semiconductors should be nurtured not as conglomerate businesses but as South Korea's shield. Market dynamics can change in an instant.

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