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Korean Industrial Insight No. 14 of AI, Semiconductors, Batteries, Electric vehicles, and Bio |
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2025-07-01 |
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Ⅰ. AI INDUSTRY TRENDS
1. AI Textbooks Face Removal Crisis, Sparking Field Confusion
- EDUCATION COMMITTEE TO MAKE AMENDMENT TO THE PRIMARY AND SECONDARY EDUCATION ACT
- INITIATES MOVE TO RECLASSIFY AND DOWNGRADE AI TEXTBOOKS TO EDUCATIONAL MATERIALS
- SCHOOLS TO ADOPT AUTONOMOUSLY, INCURRING COSTS
- DEVELOPERS FACE BILLIONS OF LOSSES, LAWSUITS LOOM
The artificial intelligence (AI) digital textbooks, which were implemented in schools starting this year, are now facing potential withdrawal merely a year after their introduction. As the National Assembly has initiated proceedings to reclassify the status of AI digital textbooks from official “textbooks” to supplementary “educational materials,” significant confusion in the field and potential legal disputes with developers are anticipated.
On the 11th, the National Assembly's Education Committee tabled an amendment to the Primary and Secondary Education Act, which redefines the legal status of AI digital textbooks as educational materials.
A bill to classify AI textbooks as educational materials had previously passed the parliamentary hurdle last year. Led by the then-opposition Democratic Party, it successfully passed the Education Committee, the Legislation and Judiciary Committee, and the plenary session, but was ultimately met with a veto exercised by then-acting President Choi Sang-mok.
Under the Lee Jae-myung administration, the future of AI textbooks remains highly uncertain. The Democratic Party, through its manifesto, emphasized its commitment to "address the confusion in the educational field caused by the hasty introduction of AI digital textbooks," further stating that it would "classify AI digital textbooks as educational materials and ensure schools' autonomous selection rights."
However, despite the Democratic Party's stated aim to alleviate field confusion, concerns are being raised that downgrading the status of AI textbooks to educational materials could, in fact, exacerbate the existing challenges.
Educational materials are adopted at the discretion of schools, following approval by their respective school operating committees, and, unlike textbooks, they incur associated costs. As educational materials are not covered under free and compulsory education, their utilization may vary significantly across different provinces and schools, depending on their financial capacities. Furthermore, potential copyright issues could arise, making it challenging to leverage high-quality content effectively.
Since educational materials do not undergo official approval processes or revision and supplementation systems, ensuring their content and technical quality is challenging. Currently, AI digital textbooks are mandated to provide accessibility for students with special educational needs, translation functionalities for students from multicultural backgrounds, and robust personal information protection measures. However, such comprehensive provisions are not obligatory for educational materials.
Consequently, publishers have indicated their intent to initiate a series of lawsuits. Several AI textbook publishers, including Chunjae Text, have already filed administrative lawsuits against Minister of Education Lee Ju-ho with the Seoul Administrative Court. Developers assert that they are facing substantial losses, ranging from tens to hundreds of billions of Korean won, due to the delayed full-scale implementation, following significant investments in AI textbook development. Furthermore, it is noted that the ongoing maintenance costs required for the smooth operation of AI textbooks are considerable.
Further development is also considerably low. The Yoon Suk-yeol administration has opted to postpone the introduction of AI textbooks for social studies and science subjects by one year each, in an effort to regulate the pace of implementation. Consequently, developers are currently not proceeding with further development, given the delays in introducing additional subjects.
The government's policy approach is currently in a state of confusion. The Ministry of Education, the Korea Institute for Curriculum and Evaluation, and the Korea Foundation for the Advancement of Science and Creativity have commenced the approval process for AI digital textbooks in English and Mathematics for 5th and 6th graders in elementary school and 2nd graders in middle school, which are scheduled for introduction next year. Re-approval is also being conducted for AI textbooks already introduced in grades this year. As the legal amendments have not yet been finalized, the approval procedures are proceeding in accordance with current legislation. Furthermore, digital tutors, intended to support classes utilizing AI textbooks, are also being recruited as planned.
2. South Korea’s 2.5 Trillion Won National AI Computing Center Project Fails Again Due to Lack of Bidders
- Re-tender issued without changes after initial failure
- Ministry of Science and ICT to re-discuss project direction with Ministry of Strategy and Finance, FSC, and Ministry of Commerce, Industry and Energy
The government's re-tender for the National Artificial Intelligence (AI) Computing Center construction project was unsuccessful, as no private consortia submitted bids.
Previously, the government had set a strategic goal to establish a Special Purpose Company (SPC) through a public-private joint investment, with the aim of constructing a national AI computing center by 2027. This center was projected to have an estimated budget of KRW 2.5 trillion and deliver performance exceeding 1 ExaFLOPS (EF).
However, it was reported that major corporations did not actively participate throughout the initial tender, which concluded on May 30. Industry observers attributed the companies' lukewarm response to several key factors, including: the significant investment burden on corporations, an unclear revenue model, the 51% public and 49% private equity structure of the Special Purpose Company (SPC), and the inclusion of a purchase claim clause.
Even the Samsung SDS consortium, which was considered a strong contender for participation (including Samsung SDS, Naver, Samsung Electronics, and ELICE Group), did not submit a participation proposal.
According to the project announcement, the private sector was required to invest approximately 200 billion won by 2030, contributing to a total investment of 400 billion won alongside the government and public sectors. Concerns were also raised regarding the government's decision to set its public stake at 51%, which could potentially lead to the Special Purpose Company (SPC) being designated as a public institution, thereby limiting private sector autonomy.
However, the Ministry of Science and ICT re-issued the tender without modifying the original requirements. It is therefore understood that the project's failure to attract bids again is largely attributable to the absence of any significant improvements or adjustments in the new announcement.
Meanwhile, the Ministry of Science and ICT intends to engage in discussions with relevant government bodies, including the Ministry of Economy and Finance, the Financial Services Commission, and the Ministry of Trade, Industry and Energy, to deliberate on the future direction of the project.
3. AWS and SK Partner to Build Major AI Data Center in Ulsan, Boosting Korea’s Global AI Leadership
- New “Ulsan AI Zone” to deliver AWS AI and cloud capabilities
- Facility designed to meet global performance and security standards, operational by 2027
Amazon Web Services (AWS) announced on the 22nd that it is expanding its cloud infrastructure within South Korea, in collaboration with SK Group.
In line with this initiative, AWS plans to establish a new data center in Ulsan, in partnership with SK Group, to facilitate the development of a new AI Zone (AWS AI Zone).
The AI Zone is designed to integrate and provide a range of advanced features, including: servers equipped with AWS-dedicated AI infrastructure and world-class semiconductors, an UltraCluster network engineered to accelerate AI training and inference speeds, AWS services such as Amazon SageMaker AI and Amazon Bedrock, and AI application services like Amazon Q.
To formalize this initiative, AWS and SK Group held an agreement ceremony for the establishment of the Ulsan AI Zone on the 20th. The event was attended by key executives, including Prasad Kalyanaraman, Vice President of AWS Infrastructure Services; Jaime Valles, Vice President and Head of AWS Asia Pacific, Japan; Ham Ki-ho, CEO of AWS Korea; Chey Tae-won, Chairman of SK Group; and Yoo Young-sang, CEO of SK Telecom.
The Ulsan data center is scheduled to commence operations in 2027. This partnership is being pursued independently of AWS's previously announced long-term investment of approximately USD 5.88 billion (approximately 7.85 trillion won) in Korea by 2027.
SK Group will lead the construction of the data center, while AWS will establish the AI Zone in Ulsan to provide AI and cloud functionalities.
The AI Zone to be established in Ulsan has been designed to meet global standards for performance and security. It will feature AI-optimized computing systems, ultra-high-density rack configurations, a hybrid cooling system that integrates both air and liquid cooling, and a stable and robust network infrastructure.
SK Group plans to establish a core hub for hyperscale AI infrastructure through its AI Infrastructure Super Highway project. The ambition is to strengthen data sovereignty and enhance global AI competitiveness by directly processing AI workloads generated domestically within the country.
AWS projects that the expansion of the data center's scale and operations will lead to the creation of up to 70,000 direct and indirect jobs in the future.
Prasad Kalyanaraman, Vice President of AWS Infrastructure Services, stated, "The synergy between SK Group's exceptional technological capabilities and AWS's comprehensive AI cloud services will empower customers of all sizes and across various industries in Korea to securely develop and leverage AI technologies for innovation."
Chey Tae-won, Chairman of SK Group, expressed his satisfaction, stating, "By combining the strengths of SK Group and AWS, we are pleased to establish core infrastructure for a Korean-style AI ecosystem and generate a powerful new driving force for the 'AI Highway'."
Ⅱ. SEMICONDUCTOR INDUSTRY TRENDS
1. Samsung Electronics to Further Boost HBM Business with AMD Partnership
- AMD confirms Samsung HBM3E integration in “M1350” series
- Attention on potential expansion of “AMD–Samsung Electronics” Collaboration
The official confirmation by AMD, a leading U.S. semiconductor design company, regarding the integration of Samsung Electronics' HBM3E into its next-generation AI chip 'MI350' series, is expected to provide significant momentum to Samsung's HBM business, which had previously been perceived as a latecomer in the high-bandwidth memory market.
Samsung Electronics could potentially overcome the technical controversies surrounding its HBM technology if it successfully passes NVIDIA's qualification tests, following the integration into AMD's next-generation chips.
According to industry sources on the 13th, AMD announced at its 'AI Advancing 2025' event, held on June 12 (local time) in San Jose, California, that its new AI accelerators, the MI350X and MI355X, incorporate 12-stack HBM3E products from both Samsung Electronics and Micron.
While AMD's use of Samsung's HBM products has been an open secret, this marks the first official confirmation from AMD.
Cho Sang-yeun, Vice President of Samsung Electronics' Device Solutions America (DSA) division, stated, "Samsung Electronics' HBM3E meets the capacity and bandwidth requirements of cutting-edge GPUs, supporting data-intensive AI and HPC workloads." He further added, "Through our long-standing partnership with AMD Instinct MI350X and MI355X GPUs, we are pleased to support innovation."
The AMD Instinct MI350 series is a new product that significantly enhances AI computing performance by up to four times and improves inference performance by up to 35 times.
While Samsung Electronics is currently undergoing HBM3E qualification tests with NVIDIA, no news of successful completion has yet been reported. In this context, AMD's official confirmation could serve as a significant positive news for Samsung Electronics.
AMD projected that the inference market will grow by over 80% in the coming years, leading the growth of the AI computing market. The company also implicitly challenged NVIDIA's position, asserting that there is no singular optimal solution for high-performance GPUs.
Furthermore, AMD previewed its MI400 series, which will feature HBM4, announcing its plans for next-generation chip releases. The MI400, slated for 2026, will utilize 432GB of HBM4 memory to achieve a bandwidth of up to 19.6TB per second.
2. LG Innotek Develops World’s First ‘Copper Post’ Technology for Semiconductor Substrates
- Enables thinner smartphone designs
- Achieves advanced performance for mobile devices
LG Innotek announced on the 25th that it has successfully developed and applied the world's first ‘Copper Post technology’ for high-value-added semiconductor substrates in mobile devices to mass production.
Smartphone manufacturers are currently engaged in intense competition to produce thinner devices. Consequently, there is a growing demand for technologies that can enhance the performance of mobile semiconductor substrates while simultaneously minimizing their physical dimensions.
The core of the Copper Post technology lies in utilizing copper pillars to connect the semiconductor substrate to the mainboard. The semiconductor substrate functions as an interface, linking electronic components such as semiconductor chips and power amplifiers to the mainboard. Electrical signals are transmitted via solder balls, which serve as connection points to the mainboard. A denser arrangement of these solder balls enables the connection of more circuits, which is a critical factor in enhancing smartphone performance.
Traditionally, solder balls were directly attached to the semiconductor substrate to establish a connection with the mainboard. To ensure stable bonding, these solder balls needed to be larger, and their spherical shape inherently occupied a significant amount of space.
When the spacing between solder balls was narrow, melted solder balls would often coalesce during the soldering process. Consequently, this method presented limitations in reducing solder ball pitch to enhance circuit density.
LG Innotek tried an innovative approach by first putting up the copper pillars on the semiconductor substrate and then placing smaller solder balls on top, rather than directly attaching solder balls. This pillar-based structure effectively minimized the surface area and overall size of the solder balls. Furthermore, the use of copper, which possesses a high melting point, ensures the stability of the pillar formation even during high temperature manufacturing processes, thereby enabling a significantly denser array design.
The application of this technology enables the production of semiconductor substrates that are approximately 20% smaller while maintaining performance equivalent to existing solutions. This advancement provides smartphone manufacturers with enhanced design flexibility and the capability to implement significantly thinner device designs.
LG Innotek explained that the technology is also optimized for high-specification smartphone functions, such as artificial intelligence (AI) computing, which necessitate the efficient processing of complex and vast electrical signals. An additional advantage is that copper exhibits a thermal conductivity more than seven times higher than lead, facilitating a faster dissipation of heat generated within the semiconductor package.
3. Vice President of SK Hynix Partner Firm Gets 18-Month Sentence for Core Semiconductor Tech Leak to China
A vice president of a partnering company with SK Hynix, who was indicted on charges including the alleged leakage of SK Hynix's core semiconductor technology to China and the illicit acquisition of equipment designs from a Samsung Electronics subsidiary, has been confirmed with a prison sentence of one year and six months.
On the 12th, the Supreme Court's First Division upheld the appellate court's ruling, sentencing Mr. A (61), the vice president of an SK Hynix partner firm, to one year and six months in prison for violating the Industrial Technology Protection Act and the Unfair Competition Prevention Act (specifically, the overseas disclosure of trade secrets).
Three other employees of the company, including the company’s research director, also received confirmed prison sentences ranging from one year to one year and six months. Additionally, one other employee received a confirmed sentence of eight months in prison, suspended for two years. Furthermore, under the joint penal provisions, the corporate entity of the partner company, which was indicted alongside these individuals, has been ordered to pay a fine of 1 billion won.
Mr. A and his associates were brought to trial on charges of leaking core semiconductor technologies, advanced technologies, and trade secrets, including semiconductor cleaning recipes and High-K Metal Gate (HKMG) semiconductor manufacturing technology, which they acquired through collaboration with SK Hynix, to a Chinese semiconductor competitor around 2018.
HKMG is a next-generation process designed to prevent leakage current and enhance capacitance. It is recognized as an innovative technology capable of increasing the speed of DRAM semiconductors while simultaneously reducing power consumption.
Furthermore, these individuals were also charged with utilizing advanced semiconductor technologies and trade secrets, including designs for SEMES's supercritical cleaning equipment—illicitly obtained through former employees of SEMES, a Samsung Electronics subsidiary—to develop equipment for export to China.
Furthermore, they were also accused of developing equipment for export to China by utilizing advanced semiconductor technologies and trade secrets, including designs for SEMES's supercritical (a state where liquid and gas cannot be distinguished) cleaning equipment, which they allegedly obtained illicitly through former employees of SEMES, a subsidiary of Samsung Electronics.
Previously, the first trial sentenced Mr. A to one year in prison, but the appellate court increased the sentence to one year and six months. Similarly, the three employees who had received suspended prison sentences in the first trial saw their sentences increased to between one year and one year and six months in the second trial. The remaining employee, who had been acquitted in the first trial, received a suspended prison sentence in the appellate court.
The appellate court, differing from the first trial, found the defendants guilty of disclosing technical information jointly developed with SK Hynix to other companies, a charge that had been acquitted in the initial ruling.
Both the prosecution and the defendants filed appeals. The Supreme Court rejected all appeals, stating that "there was no error in the appellate court's judgment that violated the rules of logic and experience, exceeded the limits of free evaluation of evidence, or misunderstood the legal principles regarding national core technologies and advanced technologies as defined by the Industrial Technology Protection Act, and trade secrets as defined by the Unfair Competition Prevention Act."
Ⅲ. BATTERY INDUSTRY TREND
1. China’s Rapidly Growing Battery Challengers Squeeze South Korea’s Market Position
- Chinese battery firms such as BYD, CALB, Gotion accelerate growth
- Hyundai Motor reportedly discussing supply with CALB after CATL
- Global market share of Korea’s top 3 battery makers stagnates
As global electric vehicle (EV) manufacturers continue to increase their adoption of Chinese batteries, including those from CATL, the market position of South Korea's three major battery companies is narrowing. With CATL maintaining its dominant market share and demand for BYD, CALB, and Gotion High-tech also on the rise, the gap between Korean and Chinese battery enterprises is notably widening.
According to industry on the 15th, Hyundai Motor Company is reportedly in discussions with China's CALB regarding a large-scale EV battery supply contract. The proposed contract volume is 30 gigawatt-hours (GWh), which is sufficient to produce 58,000 units of the Ioniq 5 EV. While Hyundai Motor has previously equipped some of its smaller car models manufactured both domestically and internationally with CATL batteries, this marks the first instance of CALB being considered as a potential supplier.
CALB is currently the third-largest battery manufacturer in China, following CATL and BYD, and is steadily expanding its influence in the global market. With increasing demand from global automakers such as Toyota, Volvo, and Hyundai Motor, in addition to its Chinese clientele, CALB is also actively establishing overseas production bases. A plant currently under construction in Portugal, with an investment of approximately 2 billion euros (about KRW 3 trillion), is targeted to begin operations in 2028.
Considering that BYD, which is closely trailing CATL, self-produces its EV batteries, CALB is effectively regarded as the second-largest battery manufacturer within China. Although its market share is significantly below CATL's, CALB was the first to be listed on the Hong Kong Stock Exchange, making its debut in October 2022.
As CATL continues to maintain an overwhelming market share lead over South Korea's three major battery manufacturers in the global market, concerns are growing regarding the rapid pursuit by latecomers such as BYD and CALB. According to SNE Research, an energy market research firm, CATL held the top position with a 29.6% market share in the global market (excluding China) from January to April this year, followed by LG Energy Solution (21.8%), SK On (10.1%), and Samsung SDI (7.8%).
Annual Cumulative Global EV Battery Usage (Excluding Chinese Market) (Unit: GWh)
Ranking Company 2024. 1~4 2025. 1~4 Growth Rate 2024 Market Share 2025 Market Share
1 CATL 28.9 39.3 36.0% 27.6% 29.6%
2 LG Energy Solution 25.0 28.9 15.6% 23.9% 21.8%
3 SK on 10.8 13.4 24.1% 10.3% 10.1%
4 Samsung SDI 11.6 10.3 -11.2% 11.1% 7.8%
5 Panasonic 10.3 9.4 -8.7% 9.8% 7.1%
6 BYD 4.0 9.1 127.5% 3.8% 6.9%
7 Farasis 2.4 2.9 20.8% 2.3% 2.2%
8 TESLA 0.6 2.8 366.7% 0.6% 2.1%
9 Gotion 1.3 2.6 100.0% 1.2% 2.0%
10 CALB 1.7 2.5 47.1% 1.6% 1.9%
Etc. 8.1 11.4 40.7% 7.7% 8.6%
Total 104.6 132.6 26.8% 100.0% 100.0%
During the same period, Chinese battery usage showed significant growth. CATL recorded 39.3 GWh, representing a 36.0% increase; BYD saw a 127.5% surge to 9.1 GWh; Gotion grew by 100% to 2.6 GWh; and CALB increased by 47.1% to 2.5 GWh. These figures significantly surpass the growth rates achieved by LG Energy Solution (23.9%), SK On (10.3%), and Samsung SDI (11.1%).
When including the Chinese market, the robust advancement of Chinese battery companies becomes even more pronounced. In the first quarter, CATL's global market share reached 38.3%, which is approximately double the combined market share of South Korea's three major battery manufacturers (18.7%). The combined market share of CATL, BYD (16.7%), CALB (3.9%), Gotion (3.5%), EVE (2.6%), and SVOLT (2.5%) amounts to 67.5%.
The Chinese battery industry is accelerating its efforts to enhance both price and quality competitiveness, bolstered by strong government support. Chinese battery companies are concentrating their research and development (R&D) efforts, leveraging substantial subsidies and tax benefits provided by the government exclusively for domestically produced batteries. Key investment areas include next-generation batteries such as sodium-ion and solid-state batteries, as well as energy storage systems (ESS).
China plans to commence production of solid-state batteries, often referred to as “dream batteries,” in 2027, with a strategic goal of establishing full-scale mass production by 2030. Furthermore, the technological advancements in developing sodium-ion batteries are also gaining significant attention. These batteries utilize more affordable and abundant sodium, compared to lithium, thereby reducing production costs and enhancing safety. In April, CATL initially unveiled its sodium-ion battery brand, “Naxtra,” and has set December as the target for its mass production.
2. Kia Motors Responds to EV Price War with Chinese Batteries and Localization Strategy
- Chinese NCM batteries to power first PBV model
- “Cost-effective and high-performing. No reason not to use.”
- Accelerating price competitiveness through local production setup
Kia Motors, a key driver of affordable electric vehicles (EVs) within the Hyundai Motor Group, is accelerating its efforts to secure global price competitiveness. Notably, the company appears to be moving swiftly to popularize EVs that rival Chinese manufacturers in both price and performance, by opting for Chinese batteries, which constitute over 30% of EV manufacturing costs. Furthermore, by establishing local EV production systems, Kia anticipates mitigating uncertainties related to tariffs.
The PV5 model clearly exemplifies Kia's strategic approach. According to the industry on the 15th, the PV5, Kia's first Purpose-Built Vehicle (PBV), is slated for sequential launches in Europe and other regions, commencing with its domestic release in South Korea during the third quarter of this year.
For the PV5, Kia has selected Chinese CATL's NCM (Nickel-Cobalt-Manganese) batteries. This marks Kia's first application of Chinese-made batteries in an EV since the Niro EV, which also utilized CATL's NCM batteries, and the Ray EV, which adopted CATL's LFP batteries.
The industry views the integration of Chinese batteries into Kia's first PBV model, a key future growth engine, as highly significant. Historically, the Hyundai Motor Group has prioritized performance, favoring domestic NCM (Nickel-Cobalt-Manganese) batteries over Chinese LFP (Lithium Iron Phosphate) batteries. This strategy aimed to build an image of superior performance, particularly in terms of driving range, despite the higher price point compared to Chinese EVs
However, given that the technological capabilities of Chinese battery manufacturers have now reached a considerable level, it is assessed that competing solely on performance against Chinese EVs is no longer sustainable. Consequently, it is interpreted that the company has initiated efforts to secure price competitiveness by opting for Chinese-made batteries, which are more cost-effective than domestic alternatives.
With the integration of Chinese NCM batteries into the PV5, the industry anticipates a gradual increase in such instances. This trend is driven by the intensifying low-price offensive from China, exemplified by BYD, the largest Chinese EV manufacturer, launching EVs priced around 20,000 euros (approximately 31 million won) in the European market. Consequently, further reducing the price of entry-level EVs is becoming a crucial factor for competitiveness.
Since last year, Kia has been selling the China-manufactured EV5 to global markets, including Australia and New Zealand. The EV5, produced in China and equipped with BYD's LFP blade batteries, has garnered favorable market responses due to its competitive pricing. Subsequently, Kia plans to launch the EV5 in South Korea, Europe, and Canada. While the integration of NCM batteries has been confirmed for the domestic model, it is understood that various options are being considered for other markets, such as Europe.
There is also a possibility that the EV2, scheduled to be released in Europe next year, will be equipped with Chinese batteries. The EV2 falls into the B-segment, a car size favored by Europeans. Given its compact size, securing price competitiveness is critical, thus Chinese batteries are being considered for cost reduction.
CATL's increasing investment in Europe, as it expands its dealings with Kia, is also viewed positively from the perspectives of tariff avoidance and supply chain stability.
3. Samsung SDI to Supply Batteries to Europe’s Leading Commercial ESS Provider
Samsung SDI announced that it has signed a battery supply agreement for Energy Storage Systems (ESS) with Tesvolt, a specialized German manufacturer of commercial ESS.
The product to be supplied is the Samsung Battery Box (SBB), an integrated battery solution. Initially, SBB 1.0 will be provided, with additional supplies of SBB 1.5 scheduled to commence from the second quarter of 2026.
Tesvolt plans to produce and install its own ESS solutions, which will integrate Power Conversion Systems (PCS) and cybersecurity systems with the supplied batteries.
Notably, both companies will continue negotiations for additional supplies and to expand their collaborative promotional efforts to secure future ESS project orders.
Samsung SDI's SBB is a product where battery cells, modules, and racks are integrated within a 20-foot container box. Its exceptional safety has earned the recognition for its technological strength in both the United States and Europe.
Tesvolt recently announced the strengthening of its cooperation with Samsung SDI, stating that "the SBB not only incorporates a unique solution (EDI) to prevent battery fires but also boasts outstanding durability and low noise." Tesvolt further affirmed that "Samsung SDI is providing solutions that precisely meet the demands of ESS system operators."
An official from Samsung SDI commented, "We have been supplying ESS batteries to Tesvolt since 2017, and this SBB supply will further strengthen our cooperation." He further stated, "We plan to accelerate our penetration into the European market going forward."
Ⅵ. ELECTRIC VEHICLE INDUSTRY TRENDS
1. EV Cumulative Sales Up Year-on-Year
- Representing 10% of total sales, indicating growth limits
- Hybrids and EREV emerge as alternatives
Despite the electric vehicle (EV) chasm (a temporary stagnation in demand), domestic EV sales in South Korea have shown an increasing trend this year compared to last year, driven by rising sales of new EV models. However, the industry is formulating a 'powertrain diversification' strategy due to the slower-than-anticipated growth in EV adoption.
According to CarIsYou Data Research Institute on the 15th, from January to May this year, EVs accounted for 72,419 units in domestic new vehicle registrations by fuel type, marking a 62.6% increase compared to the same period last year. This represents the steepest growth among all fuel types, including gasoline (-11.4%), diesel (-19.9%), LPG (-30.6%), and hybrids (36.1%).
Following this trend, both Hyundai Motor and Kia have observed an increase in their cumulative EV sales this year. From January to May, Hyundai Motor sold 22,138 EVs, marking a 67.5% increase compared to the same period last year. Kia also reported a 78.5% increase, selling 23,341 units.
This surge in EV sales is primarily attributable to the “new model effect.” Hyundai Motor's new electric Sports Utility Vehicle (SUV), the Ioniq 9, significantly contributed to its performance with 2,841 units sold from January to May this year. In May, Kia's electric sedan EV4 recorded sales of 1,553 units, representing a 257.8% increase from the previous month. KG Mobility's mid-sized electric pickup truck, the Musso EV, also saw a substantial rise, with 1,166 units sold in May, a 131.3% increase month-over-month.
Sales of imported vehicles also increased, primarily driven by new electric passenger car models. Tesla's new Model Y Juniper recorded sales of 6,237 units in May, marking a 675.7% increase compared to the previous month. During the same period, Polestar's Polestar 4 sold 292 units, a 63.1% increase month-over-month. Volkswagen's ID.5 saw a remarkable surge, with 288 units sold, representing a 3,100% increase from the previous month.
Manufacturers' own discount policies also played a role in boosting sales. For instance, Hyundai Motor's Ioniq 6, which had a 6 million won discount promotion last month, sold 754 units in May, a 23.6% increase from the previous month. Some EVs have even surpassed their internal combustion engine counterparts in sales. A prime example is Hyundai Motor's Casper Electric. Out of 6,969 Casper units sold cumulatively from January to May this year, 3,902 were electric, outselling the conventional internal combustion engine model.
Sales increasing, but slower growth leads to investment pace adjustment
Statements from executives of major automobile corporations indicate an observable inclination to prioritize hybrids as an alternative to EVs. Akio Toyoda, Chairman of Toyota Group, projected early last year that "EVs will not exceed 30% market share, with the remaining 70% being taken by hybrid vehicles and others." John Lawler, Chief Financial Officer of Ford, stated in 2023 that "if the pace of EV adoption slows, hybrids will become a larger part of the business." Jose Munoz, President of Hyundai Motor, recently announced in an interview with a U.S. automotive media outlet on the 9th that they would "double hybrid vehicle production."
Hybrids and EREVs gaining attention as EV alternatives
In addition to traditional hybrids, Extended-Range Electric Vehicles (EREVs) have recently garnered significant attention. Like hybrid vehicles, EREVs are equipped with an internal combustion engine, an electric motor, and a battery. However, unlike hybrids where the engine serves as the primary power source, EREVs are primarily propelled by the electric motor, with the engine exclusively used for charging the battery.
EREVs offer the advantage of being environmentally friendly while providing approximately twice the driving range of pure EVs, making them less reliant on charging infrastructure. According to Market Research Intellect, a global market research firm, the global EREV market is projected to reach USD 518 billion (approximately 748 trillion won) by 2031.
Major automotive manufacturers are also accelerating the development and launch of EREVs. Hyundai Motor Group recently announced that it is considering the launch of a Genesis EREV. Toyota is reportedly planning to introduce EREV versions of its Highlander and Sienna models in the Chinese market.
2. Hyundai Motor’s Ulsan Plant EV Line Suspends Operation for the Fourth Time This Year
- Ulsan Plant 1 produces Ioniq 5 and Kona EV
Hyundai Motor Company has decided to temporarily suspend operations at its EV production line in the Ulsan plant. This marks the fourth suspension of operations this year.
Amid the persistent sales slump, exacerbated by the “EV chasm,” and the recent imposition of import car tariffs by the United States, the company has opted to halt vehicle production at the plant rather than continue operations.
The company announced on the 23rd that it would suspend operations at Line 2 of its Ulsan Plant 1, which produces the Ioniq 5 and Kona Electric, for three days starting June 25.
Hyundai Motor had been operating its production lines, enduring “empty pitches” where conveyor belts ran without vehicles to assemble. However, the company determined that the situation was no longer sustainable and decided to cease operations.
To address sluggish EV sales, the company initiated aggressive promotions starting last month, including discounts of up to 6 million won on the Ioniq 5. However, the pace of inventory reduction did not meet expectations.
Sales of both the Ioniq 5 and Kona Electric for export have also been sluggish. From January to April this year, the export volumes of the Ioniq 5 (9,663 units) and Kona Electric (5,916 units) decreased by 65% and 42% respectively, compared to the same period last year. The imposition of a 25% tariff by the U.S. on imported cars, effective April 3, has further contributed to a decline in demand for foreign-made EVs.
Line 2 of Ulsan Plant 1 had previously suspended operations in February, April, and also last month.
3. Mercedes-Benz Korea Bets on Ultra-Fast EV Charging Stations: 150 Stations Planned Across 25 Regions
- CEO Vaitl holds roundtable at ‘2025 Dream Ride’ event
- Major expansion of high power charging (HPC) network underway; goal of 150 stations
- Direct sales system to launch next year, offering fixed pricing online and offline
- Dealers to focus on customer service for enhanced satisfaction
Matthias Vaitl, CEO of Mercedes-Benz Korea, made these remarks during a roundtable with reporters at the '2025 Dream Ride in Jeju' event held on June 24.
During the event, CEO Vaitl announced that Mercedes-Benz Korea is officially starting a significant expansion of its investment in domestic EV charging infrastructure.
Specifically, the company plans to significantly expand its proprietary ‘High Power Charging (HPC) Network,’ Mercedes-Benz's ultra-fast EV charging infrastructure currently being established worldwide. To facilitate this expansion, Mercedes-Benz also established ‘Mercedes-Benz HPC Korea Ltd.’ in Korea last April.
CEO Vaitl stated, "The HPC charging stations, which are considered a key part of Mercedes-Benz Korea's future strategy, recently finalized their contract." He added, "Based on this agreement, the first HPC charging station is scheduled to open this year, and ultimately, we aim to establish a total of 150 charging stations across 25 locations."
In addition, CEO Vaitl emphasized the company's commitment to strengthening its position in the EV market, which has been perceived as relatively underperforming compared to the internal combustion engine segment.
CEO Vaitl stated, "I believe Mercedes-Benz possesses a highly attractive lineup not only in internal combustion engines but also in the EV sector." He further explained, "However, earlier this year, we experienced supply shortages for models such as the EQA and EQB, which contributed to lower EV sales."
He continued, "Mercedes-Benz Korea applies the same principles of technological quality and safety to EVs as it does to internal combustion vehicles." He added, "For next year, we have planned the most comprehensive new car launches in our history, which will allow us to introduce a diverse EV lineup."
He further added, "It appears that the transition to electrification for the entire automotive industry, not solely Mercedes-Benz, is taking longer than initially anticipated a few years ago." He concluded by stating, "We anticipate that vehicle electrification will eventually be fully realized, and until that time, Mercedes-Benz Korea will continue to offer a balanced portfolio of both internal combustion and EVs
CEO Vaitl offered a positive self-assessment of his two-year tenure as CEO of Mercedes-Benz Korea, noting the significant growth achieved in the country.
He stated, "I am grateful for the affection received from customers in Korea over the past two years." He added, "Korea, in particular, is setting new standards in the premium luxury automotive market, and I believe that Mercedes-Benz aligns well with Korean customers who pursue excellence and demand high standards."
CEO Vaitl explained, "While the first half of this year saw somewhat poor performance, I am satisfied with the visible signs of growth recovery." He further elaborated, "The growth of AMG and G-Class is particularly evident, and the E-Class continues to maintain its leading position within its segment, which suggests significant potential for clear future growth."
Ⅴ. BIO INDUSTRY TRENDS
1. Korean Bio-Health Sector Sees 16.4% Revenue Increase in Q1
Eighty-two bio-healthcare companies listed on the domestic stock market reported robust revenue and operating profit performance in the first quarter of this year.
On the 24th, the Korea Biotechnology Industry Organization released the results of its Q1 2025 trend survey on listed bio-healthcare companies. The survey analyzed human resources, R&D expenditures, revenue, and financial status of 82 publicly disclosed companies included in the bio-healthcare sector of the Korea Exchange (KRX) industry index.
In the first quarter of this year, the total revenue for listed bio-healthcare companies was recorded at KRW 8.8163 trillion. Domestic sales accounted for KRW 5.8048 trillion, representing 65.8% of total revenue, while exports reached KRW 3.0114 trillion, making up 34.2% of the total.
The year-on-year revenue growth rate for listed bio-healthcare companies was 16.4%. Domestic sales and exports increased by 7.4% and 38.6% respectively, compared to the same period last year. The Korea Biotechnology Industry Organization analyzed that this expansion was significantly influenced by export expansion, such as large pharmaceutical companies' increased contract manufacturing of biosimilars and biopharmaceuticals.
The operating profit margin for listed bio-healthcare companies in the first quarter reached 17.1%, an increase of approximately 5.3% compared to 11.7% in the first quarter of last year. This improvement is attributed to the expanded profitability of large pharmaceutical companies and the successful turnaround to profitability for small and medium-sized enterprises. The equity ratio also increased by approximately 0.06% year-on-year, reaching 74.85%. Both pharmaceutical (74.1%) and medical device (80.4%) companies maintained stable financial structures.
The workforce of listed bio-healthcare companies in the first quarter reached 50,236, marking an increase of approximately 3.1% (1,500 people) compared to the same period last year. Among these, research and development (R&D) personnel totaled 8,172, representing an increase of approximately 6.5% year-on-year. While R&D personnel in pharmaceutical companies grew by 8.3%, those in the medical device sector experienced a 4.9% reduction.
R&D investment in the first quarter increased by 11.4%. In the pharmaceutical sector, R&D investments grew across large (17.6%), mid-sized (4.7%), and small (25.3%) enterprises, leading to an overall expansion of 11.8%. In the medical device sector, while mid-sized companies experienced a 4.6% decrease, small and medium-sized enterprises significantly increased their investment by 30%, resulting in an overall growth trend of 7.9%.
2. Samsung Biologics Holds 150 Meetings at Bio USA, Solidifying Global Leadership
Samsung Biologics showcased its standing as a global Contract Development and Manufacturing Organization (CDMO) at the '2025 Bio International Convention (BioUSA),' held from June 16 to 19 at the Boston Convention & Exhibition Center in the United States. The company conducted over 150 business meetings, expressing strong expectations for both its established CDMO operations and its newly launched Contract Research Organization (CRO) business.
On-site, the company conducted over 150 business meetings with various partners. This surge was a direct result of a significant increase in spontaneous meetings for inquiries and discussions related to new orders for its CDMO business.
The company is also strengthening the competitiveness of its existing CDMO business. John Rim, CEO of Samsung Biologics, commented during a press conference at the event regarding the recent spin-off, stating, "By concentrating more on our core CDMO business, we anticipate a positive impact on both corporate and shareholder value."
To address the continuously growing biopharmaceutical CDMO market, Samsung Biologics plans to sequentially complete Plants 6 through 8 at its Second Bio Campus by 2032, following the recent activation of its 180,000-liter Plant 5. Upon completion of the Second Bio Campus, the company's total production capacity is projected to reach 1.324 million liters, solidifying its position as the global leader in production capacity.
The company is also actively exploring opportunities to secure additional production facilities, having recently participated in the bidding for Site 11 in Songdo, Yeonsu-gu, Incheon, for further land expansion.
To broaden its portfolio, Samsung Biologics has secured capabilities related to Antibody-Drug Conjugates (ADCs), for which it recently began operating dedicated production facilities, and Antibody-Oligonucleotide Conjugates (AOCs), which utilize ADCs. The company is also accelerating its entry into the Cell & Gene Therapy (CGT) market by venturing into Adeno-Associated Virus (AAV) Contract Development Organization (CDO) business.
Samsung Biologics has underscored customer-centric operations, the identification of potential opportunities, and the continuous expansion of collaborations as key factors of its sales strategy. To this end, the company has established sales offices in New Jersey and Boston, USA, through its U.S. subsidiary, Samsung Biologics America (SBA). A sales office in Tokyo, Japan, also opened earlier this year. A real-time response system has been implemented between its global sales offices and its headquarters in Songdo, Incheon, to ensure prompt responsiveness to customer demands.
An official from Samsung Biologics stated, "We will continue to expand along the three main axes: production capacity, portfolio, and global footprint." The official added, "We will actively broaden our customer base to include not only the existing top 20 global pharmaceutical companies but also the top 40."
3. ABION’s Stock Price Increase on KRW 1.8 Trillion Technology Export Deal
- Export of ABN501 candidate
- Upfront payment of USD 34 million received
ABION, a biotechnology company, saw its stock price hit the daily limit after securing a technology export deal for its new antibody drug candidate 'ABN501' worth approximately 1.8 trillion won.
According to the Korea Exchange, ABION's shares traded at 7,600 won, a 29.91% (1,750 won) increase from the previous trading day. The previous day, ABION announced that it had signed a co-development and exclusive licensing agreement for ABN501 (an antibody targeting CLDN3 and four other proteins). The identity of the contracting party was not disclosed. Under the agreement, ABION grants the exclusive license for ABN501 to the partner.
The total contract value amounts to USD 1.315 billion (approximately KRW 1.8 trillion). Of this, the upfront payment is USD 5 million (approximately KRW 6.8 billion) per target antibody, totaling USD 25 million (approximately KRW 34 billion). Upon successful development, ABION stands to receive milestone payments totaling USD 290 million (approximately KRW 397 billion), with USD 58 million (approximately KRW 79.4 billion) per target antibody. Milestone payments upon successful commercialization are set at USD 200 million (approximately KRW 273.8 billion) per target, amounting to a total of USD 1 billion (approximately KRW 1.369 trillion).
ABION will conduct non-clinical studies for the five protein-targeting antibodies, including CLDN3. The contracting party will be responsible for further research, development, and commercialization. ABION stated, "If an antibody therapeutic targeting four other proteins in addition to the 'CLDN3' target protein is developed, the contracting party will have preferential rights to these substances." The company added, "For substances targeting three other proteins or simultaneously targeting them, the contracting party will have preferential negotiation rights, which could lead to an increase in the total contract amount or exclusive negotiations."
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Korean Industrial Insight No.16 of AI, Semiconductors, Batteries, Electric vehicles, and Bio in chinese
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