[Paek Jongmin's Shockwave] To Win the Technology Hegemony Race...

Deputy Prime Minister and Minister of Science and ICT, Hoon Bae (sixth from the left in the front row), is taking a commemorative photo with company representatives after awarding the National Strategic Technology Certificate and Merit Commendation last February. Photo by Ministry of Science and ICT

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Boston, United States, 2016. At the world-renowned startup competition "MassChallenge," which brought together more than 5,000 innovative startups from around the globe, the little-known Korean startup "EYL" earned the prestigious "Diamond Winner" award at the final stage.

At that time, "quantum security" was an unfamiliar and uncharted field even for venture capitalists. Baek Junghyun, Executive Director at EYL, had to face the judges' sharp questions-such as "Is this a technology that can be commercialized right now, and is it truly necessary?"-alone, rewriting his pitch deck every night in a foreign country where both the language and culture were unfamiliar. While Baek was fiercely competing for survival in Boston, CEO Government Seok and the research team back in Korea devoted themselves day and night to advancing the design of ultra-compact encryption chips using quantum random number generators.

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The good news from Boston was a signal of miracles to come. Three years later, in 2019, EYL opened the firmly closed doors of the United States Air Force's "AFWERX," a civilian innovation technology adoption platform known for its conservative and rigorous standards. The company successfully passed both the first and second rounds of a cryptographic chip design project-an area directly linked to defense and national security-and received praise for "exceeding the expectations of the U.S. military" with their design.

However, challenges appeared without warning. Just as the company was about to begin actual semiconductor production worth 18 billion won, the "black swan" event of the COVID-19 pandemic swept across the globe, blocking EYL's quantum leap forward. Baek recalled, "Now, after a long tunnel, we've reached the final stages of cryptographic module validation (ESV) by the National Institute of Standards and Technology (NIST), but at that time, it was a harrowing moment when the survival foundation we painstakingly built in a foreign land was nearly shaken to its core."

Officials from IWAEYL are taking a commemorative photo after winning the grand prize, defeating 500 competitors at the final stage of the 2016 MassChallenge. It took IWAEYL 10 more years to receive confirmation as a national strategic technology. Photo by IWAEYL

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Despite possessing overwhelming technology and infrastructure that was recognized overseas first, the threshold for "National Strategic Technology," the highest honor awarded by the Korean government, was not easy to cross.

The "National Strategic Technology Verification System," overseen by the Ministry of Science and ICT, officially confirms whether academia, industry, and research institutes "possess/manage" or are "researching and developing (R&D)" any of the 50 key technologies across 12 major fields, such as semiconductors, quantum, and space. Since its inception in March 2024, only 14 companies have managed to pass the rigorous evaluation in the two years since, reflecting the system's selective nature.

EYL submitted its application proudly, armed with 33 core patents accumulated over the past decade, cryptographic module validation from the National Intelligence Service, approval for stringent nuclear safety management, and designation as an excellent procurement item by the Ministry of National Defense. However, the company did not succeed on its first attempt. After thorough supplementation, EYL finally became the first company in the quantum field to receive the National Strategic Technology Certificate last year on its second try.

The reason for such a high bar is that the evaluation criteria go beyond simply assessing whether the technology is "excellent and profitable." The government meticulously examines whether the applicant's technology perfectly matches the detailed scope of the designated core element technologies (scope alignment), and whether it meets the highest global standards for key technology targets, which are managed confidentially in terms of economic and national security (target achievement). According to the Ministry of Science and ICT and industry sources, many companies apply for evaluation but fail to pass the gate. Even in March, only three companies-Depolab (Display), Donghwa Electrolyte (Secondary Battery), and SDT (Quantum)-passed the strict screening and were recognized for their national technological necessity.

Government Seok, CEO of EYL, said, "The past ten years we endured in harsh conditions were not simply waiting for the market to open. It was a grueling process of directly shaping and carving the foundation of the future security market that we ourselves will lead one day." He shared how meaningful it was to finally be recognized in his homeland.

◇ U.S. "CET Guidelines" and "Genesis Mission" as twin engines for technological weaponization = Strategic technologies are at the core of the technology supremacy race. In 2023, the United States specially designated artificial intelligence (AI), quantum computing, and next-generation semiconductors as "Critical and Emerging Technologies (CET)." CET designation is not merely a list of promising technologies. It serves as a guideline indicating that these technologies are essential for maintaining U.S. technological supremacy and must not fall into the hands of adversaries. Hwang Suwook, a researcher at Meritz Securities, analyzed, "Since the U.S.-China technology supremacy dispute began in earnest in 2018, there has been a clear shift in federal R&D budget momentum," adding, "The recent U.S. CET standards strategy is also a continuation of a strong will to directly invest massive national funds and protect specific technologies to keep China in check."

The "Genesis Mission," launched by the U.S. government at the end of last year, is also a continuation of its drive to foster strategic technologies. The Genesis Mission is modeled after the Manhattan Project (which developed the atomic bomb) but reimagined for the AI era. The goal is to dramatically shorten research cycles in new materials, new drugs, energy, and semiconductors by integrating the government's vast datasets, the Department of Energy's supercomputers, and the enormous capital of leading private tech firms. Its aim is to maintain the U.S.'s long-term advantage in strategic technology fields and to apply AI to nuclear energy, core materials, and defense technologies crucial for national security.

China's counterattack is equally fierce. To achieve autonomy in AI and semiconductors-technologies restricted by the United States-the Chinese government has launched the third phase of its National Semiconductor Industry Investment Fund (the so-called "Big Fund") with a scale of 344 billion yuan (about 64.33 trillion won). Backed by massive government investment, China is rapidly narrowing the AI technology gap with the U.S., seemingly unfazed by U.S. export controls on AI semiconductors. According to the annual AI report released by Stanford University on April 13 (local time), as of March, the performance gap between the top U.S. AI model and the top Chinese AI model had narrowed to just 2.7 percentage points.

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◇ Powerful incentives... Government also signals system upgrades = Despite the risk of rejection and the rigorous evaluation process, companies pursue National Strategic Technology certification because of decisive benefits. The most notable is preferential treatment for "super-gap technology special listing." Usually, innovative startups that have not yet achieved large-scale profits must receive at least an A grade from one evaluation agency and a BBB grade or higher from another, both designated by the Korea Exchange, in order to go public on KOSDAQ via the technology special listing route.

However, companies that have been confirmed to "possess/manage" National Strategic Technology need to pass only one technology evaluation (A grade or higher) to immediately apply for a preliminary listing review. They also receive bonus points when being selected as a designated military service company, policy finance benefits, and additional points during evaluations for inter-ministerial government R&D projects. However, the preferential treatment for technology special listing is seen as the greatest benefit, according to the companies.

In fact, EYL and SDT are seeking KOSDAQ listings to secure funding for investment in the quantum sector. By going public, they aim to raise capital to continue evolving their National Strategic Technologies. EYL recently succeeded in equipping its quantum security chip "NC11" with quantum-resistant encryption. Developing such chips and proceeding to mass production and supply requires massive funding.

Companies argue that the National Strategic Technology Verification System should not remain a one-time ticket for listing. One company official said, "Not much has changed after receiving strategic technology certification. The government should provide more active support to prioritize technologies for the nation." Another company CEO commented, "Long-term support is lacking."

Professor Seo Yongseok of the Moon Soul Graduate School of Future Strategy at KAIST explained, "Support for strategic technology companies used to be fragmented across ministries, causing confusion, but the government is now changing course in the right direction. We need to align on common ground and move forward on one unified path. Substantial benefits for companies are also necessary."

The government is also working to revise its policy direction in line with industrial opinions and the shifting landscape of global technological supremacy. On April 15, the Ministry of Science and ICT, led by Science and Technology Innovation Headquarters Chief Inkyu Park, held the 14th "National Strategic Technology Special Committee" meeting, focusing on "Directions for Advancing the National Strategic Technology System (proposal)" and "Directions for Promoting the Leading NEXT Project for National Strategic Technologies (proposal)." The results of these discussions will be finalized and announced within this month.

Barriers between ministries have also been removed. In March, following a resolution at the meeting of ministers related to science and technology, the Ministry of Economy and Finance, Ministry of Science and ICT, and Ministry of Trade, Industry and Energy-each previously operating their own fragmented systems-agreed to reorganize the national strategic technology management system, consolidating what had been divided into 513 separate units into 19 common technology fields for integrated management.

The safety net for companies that did not pass the evaluation has also been strengthened. Cho Sunhak, Director General of Science and Technology Policy at the Ministry of Science and ICT, said, "For companies that applied for National Strategic Technology verification but unfortunately did not pass the evaluation, we will provide targeted consulting to clarify the specific scope of strategic technologies, support companies in realigning their R&D direction, and ensure they can continue their research at any time." This reflects the government's intent to continue expanding the number of companies securing strategic technologies.

Inkyu Park, Chief of the Science and Technology Innovation Headquarters at the Ministry of Science and ICT, emphasized, "Recently, major powers have been overtly designating key national strategic technologies and investing heavily, even weaponizing them through measures such as export controls. Our government, too, will continue to update an integrated 'national technology management system' amid intensifying technological supremacy competition, and will offer full support to help our companies secure a clear technological edge."

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