SEOUL, July 28 (AJP) - South Korea risks squandering its AI-driven manufacturing advantage unless it evolves from one of the world's biggest exporters into an "ecosystem power" that shapes the technologies, standards and alliances underpinning the global artificial intelligence economy, a leading Washington think tank said.
The assessment by the Center for Strategic and International Studies (CSIS) came under spotlight as President Lee Jae Myung seeks to reposition South Korea from a manufacturing powerhouse to a central player in the global AI supply chain.
During a visit to Silicon Valley over last weekend, Lee met Nvidia Chief Executive Jensen Huang, OpenAI Chief Executive Sam Altman, Anthropic Chief Executive Dario Amodei and Broadcom Chief Executive Hock Tan, while overseeing new AI partnerships between Korean and U.S. technology companies.
Those meetings echoed the central thesis of a CSIS report published earlier this month, Export Nation or Ecosystem Power: South Korea's Choice in the AI Industrial Age.
Written by Navin Girishankar, president of the think tank's Economic Security and Technology Department, the report argues that South Korea's next economic leap will depend not on exporting more semiconductors, batteries, ships and automobiles, but on controlling what it calls the "architectural control points" of future industries — standards, platforms, financing mechanisms and industrial partnerships.
The report contends that South Korea stands at a strategic crossroads. Its export-led model continues to produce impressive results, with goods exports reaching a record $709.7 billion in 2025 and semiconductor exports climbing 22 percent to an all-time high of $173.4 billion amid booming demand for AI memory chips. Yet those headline figures conceal mounting structural risks, it says.
China, once South Korea's largest source of trade surpluses, has rapidly narrowed the technology gap in sectors ranging from electronics and batteries to electric vehicles and petrochemicals. Meanwhile, the United States is increasingly using tariffs and investment incentives to encourage manufacturing on American soil. Combined with demographic decline and intensifying technological competition, those forces mean South Korea can no longer rely solely on export growth or market diversification, according to the report.
From supplier to architect
CSIS argues that future industrial leadership will belong not to countries producing the most components, but to those controlling the ecosystems in which those components operate.
An ecosystem power occupies what the report calls the "architectural control points" of an industry — technical standards, certification systems, software platforms, financing structures and supply-chain relationships that other companies and governments must adopt.
South Korea already possesses many of the building blocks.
The report identifies four strategic technology pillars: AI, semiconductors and communications; batteries and advanced manufacturing; industrial robotics and machine tools; and energy and critical minerals. The opportunity, it argues, lies not in dominating individual sectors but in integrating them into complete industrial ecosystems.
SK hynix's leadership in high-bandwidth memory illustrates the concept. HBM has become indispensable for AI accelerators powering advanced computing systems.
Because replacing HBM would require redesigning processors, software, chip packaging and data-center architecture, South Korea's strength extends well beyond selling memory chips, giving it influence over the broader AI ecosystem.
Samsung Electronics' foundry business, LG's battery technologies and Hanwha's naval engineering could play similar strategic roles in their respective industries.
That importance was echoed during Lee's Silicon Valley meetings.
Huang said Nvidia's AI supercomputers would not have been possible without Korean-developed HBM. Altman said today's AI revolution could not have emerged without South Korea's contributions, while Amodei highlighted the country's strengths in semiconductors, AI infrastructure and engineering talent.
Yet the report cautions that being indispensable today does not guarantee remaining indispensable tomorrow. Unless South Korea evolves from supporting individual industries to orchestrating complete ecosystems, its competitive advantage could gradually erode.
A deeper alliance with the United States
CSIS places the United States at the center of South Korea's next stage of industrial development.
The report argues that Korean companies need access to frontier research, deep capital markets, large-scale demand and trusted geopolitical partners — advantages that Washington can provide more reliably than Beijing. In return, the United States increasingly depends on South Korea's capabilities in advanced memory, semiconductors, batteries, energy infrastructure and shipbuilding to sustain its own AI ambitions.
Rather than focusing narrowly on trade deficits, tariffs or defense burden-sharing, the alliance should evolve toward jointly building trusted AI and advanced-manufacturing ecosystems that reduce dependence on China, the report says.
South Korea's growing industrial footprint across Southeast Asia could further strengthen that strategy by creating alternative supply chains spanning Indonesia, Malaysia and the Philippines.
The report stresses that international partnerships alone will not be enough.
It calls for more predictable regulation, stronger cybersecurity protections and a broader ecosystem of innovative mid-sized companies capable of complementing South Korea's conglomerates. Regulatory certainty is particularly important for long-term AI investment, while cybersecurity has become an alliance issue as attacks on Korean semiconductor facilities could disrupt AI computing worldwide.
CSIS also highlights capital as a strategic tool. With public investment institutions such as the National Pension Service and Korea Investment Corporation managing roughly $1.5 trillion, South Korea has the financial capacity to establish co-investment vehicles with the United States supporting semiconductors, AI infrastructure, advanced manufacturing and critical minerals.
The report concludes that South Korea's next "Miracle on the Han River" will depend less on exporting more products than on embedding Korean companies into the architecture of allied technology systems. If the first miracle was built by becoming one of the world's leading manufacturers, the second, it argues, will come from becoming one of the architects of the global AI economy.
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