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Korean Industrial Insight No. 16 of AI, Semiconductors, Batteries, Electric vehicles, and Bio

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KH

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2025-09-01

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Ⅰ. AI INDUSTRY TRENDS

1. MSIT Vice Minister Pledges Enhanced Support System for AI Startups

- MSIT hosts meeting to invigorate investment and support for AI startups
- AI startups and VC stakeholders discuss industry development strategies
The Ministry of Science and ICT (MSIT) announced that it held an on-site meeting to gather opinions from representatives of Artificial Intelligence (AI) startups and venture capital firms, and to discuss future development strategies for the industry.
Since taking office, the Second Vice Minister has consistently engaged in field consultations across various sectors to get on-site feedback and explore policy support measures aimed at realizing Korea's ambition to become a global top three AI powerhouse. The meeting on this day focused on strategies to invigorate investment and strengthen government support, essential for fostering the growth of domestic AI startups and revitalizing the entrepreneurial ecosystem.
During the discussion, companies at various growth stages, from those that have secured early-stage investments to KOSDAQ-listed enterprises, such as Deeply, ZETICai, METAFACTORY Corporation, Tripbtoz, Glorang, and Flitto, shared their respective challenges and proposed suggestions for essential policy support.
Furthermore, venture capital firms such as Quantum Ventures Korea and DSC Investment, along with accelerators like Y&ARCHER that support startup incubation and early-stage investments, also put forth policy initiatives aimed at revitalizing investment and support.
Also present at this meeting were the Korea Telecommunications Operators Association (KTOA), which manages KIF established by the three major mobile carriers for investments in ICT startups, and the Korea AI and Software Industry Association (KOSA) as an industry representative.
The Second Vice Minister of MSIT stated, “As both the public and private sectors agree on the necessity of expanding AI investment, we anticipate a rise in diverse direct and indirect investments and an expansion of the related market.” He added, “The government will, in cooperation with the private sector, provide priming funds for investment, while also dedicating greater efforts to enhancing the AI startup support system, reflecting feedback from the field.”

2. Samsung Electronics Expands AI-Based ‘Home Appliance Remote Diagnosis’ to Over 120 Countries

Samsung Electronics announced that it has expanded its AI-powered 'Home Appliance Remote Diagnosis (HRM)' service to over 120 countries worldwide.
This service remotely monitors the status information of products connected via SmartThings, analyzes the data using AI, and then enables customer service advisors to provide diagnoses and consultations comparable to those offered by professional engineers. The service was initially launched in South Korea in 2020.
Samsung Electronics piloted this service in 10 English-speaking countries, including the United States and the United Kingdom, starting last year. This year, the company has expanded support to a total of 17 languages, including Spanish, Portuguese, and Arabic, making the service accessible to customers in over 120 countries.
The 17 supported languages include Korean, German, Russian, Vietnamese, Spanish, Arabic, English, Italian, Indonesian, Chinese, Czech, Thai, Turkish, Portuguese, Polish, and Hebrew.
When a product exhibits any abnormal symptoms, customers can access Samsung Electronics' 'Home Appliance Remote Diagnosis' service by contacting their contact center. With user consent, product status information—including internal temperature, humidity, the performance of key components, and recent operational error history—is transmitted via SmartThings. Subsequently, this data is analyzed by AI to accurately diagnose the problem.
The information analyzed by the AI is provided to customer service agents in a report format. This enables the agents to accurately identify the product's status and either offer self-measure instructions or arrange on-site service visit appointments. This allows users to receive a professional diagnosis comparable to a direct inspection by an engineer, without needing to explain the product's unusual condition or symptoms.
Additionally, for screen-equipped home appliances, such as Family Hub refrigerators featuring a 32-inch display and other refrigerators and washing machines with an 'AI Home' touchscreen, remote diagnosis is also available through screen sharing. Engineers can remotely monitor the customer's product screen to assist with measures such as system error resolution or driver updates.
The 'Home Appliance Remote Diagnosis' service is available for SmartThings-supported models manufactured after 2019, including refrigerators, washing machines, and dryers.

3. KT Initiates Korea’s First Commercial AI-RAN Network

- Key 6G network technology will be piloted in Naju, slated for wider rollout
KT has announced the commencement of Artificial Intelligence-based Radio Access Network (AI-RAN) technology verification on its commercial 5G network, marking the first such initiative in South Korea.
AI-RAN is a next-generation communication network technology designed to deliver an optimal network environment by analyzing real-time traffic data exchanged between base stations and network servers. It is regarded as an essential technology for the forthcoming 6G era.
The key AI-RAN technologies KT is integrating into its commercial network include machine learning-based 'Channel Estimation' and 'MU-MIMO (Multi-User Multiple-Input Multiple-Output)’, which allows for simultaneous data transmission to multiple users using a single frequency and time resource.
The Channel Estimation feature learns complex radio wave patterns to accurately predict changes in signal strength according to the wireless environment, thereby reducing data loss and delay. This ensures stable communication quality and enables the transmission of more data over the same frequency.
MU-MIMO significantly increases the amount of data a base station can transmit within the same timeframe, thereby enhancing overall processing capacity. This enables users to experience faster speeds and superior quality.
The verification process is being carried out in the Naju region of Jeollanam-do, utilizing the dedicated AI processor integrated into Nokia's latest 5G base station equipment.
Based on the verification results, KT plans to launch commercial AI-RAN services and gradually expand their areas of application.
The Head of KT's Network Strategy Division stated, "AI-RAN is an essential technology that not only elevates customer-perceived quality but also prepares us for the 6G era. KT aims to lead network innovation by being the first to verify and deploy AI-RAN on commercial networks, and we intend to continuously reinforce our technological leadership."


Ⅱ. SEMICONDUCTOR INDUSTRY TRENDS

1. Hyundai Mobis Obtains International Standard Certification for Automotive Semiconductor R&D Process

- Highest Integrity Grade awarded to entire R&D process, from design to quality verification
Hyundai Mobis's automotive semiconductor research and development process has achieved the highest grade of ISO 26262 certification, an international standard for functional safety. This signifies that the entire process, encompassing semiconductor design through to quality verification, has received international certification, extending beyond individual product units.
According to Hyundai Mobis, this certification ensures that automotive semiconductors designed through standardized R&D procedures will automatically achieve the same level of reliability as if they were certified on a product-unit basis.
Hyundai Mobis plans to actively share these achievements and expertise with key partners, while also taking the lead in expanding the domestic automotive semiconductor ecosystem.
Hyundai Mobis secured this certification from Exida, a globally renowned German specialized auditing firm for automotive functional safety and cybersecurity.
ISO 26262 is an international standard established to prevent safety incidents in automotive electrical and electronic systems, and it has been applied to automotive semiconductors since 2018.
While semiconductors that function as the “brain,” such as microcontrollers (MCU) or application processors (AP), are typically certified as individual products, it is widely recognized that obtaining certification for an entire research and development platform, as achieved by Hyundai Mobis, is an exceptionally stringent and rare accomplishment.
Hyundai Mobis was awarded ASIL-D level, the most challenging level within the Automotive Safety Integrity Level (ASIL) framework for ISO 26262 certification. ASIL is categorized into four levels, from A to D, with ASIL-D being the highest grade, ensuring the prevention of safety incidents with over 99% strict reliability.
Hyundai Mobis anticipates that this certification will serve as a catalyst for the simultaneous enhancement of the competitiveness of its in-house designed semiconductors, along with the control units and core components that incorporate them.

2. Global Photoresist Leader Builds Major Plant in Pyeongtaek, South Korea

- Tokyo Ohka Kogyo (TOK) commences construction in Pyeongtaek on the 20th
- CEO hints second facility construction
- To stabilize domestic semiconductor material supply
Tokyo Ohka Kogyo (TOK), a global leader in critical semiconductor materials from Japan, held a groundbreaking ceremony at the Poseung (BIX) Industrial Complex within the Gyeonggi Free Economic Zone Authority in Pyeongtaek on the 20th, commencing the construction of its manufacturing plant.
According to Gyeonggi Province, TOK Advanced Materials Co., Ltd. plans to invest KRW 101 billion in approximately 55,600 square meters within the Poseung Industrial Complex to establish facilities for high-purity chemical products and photoresist manufacturing by July of next year. 'Photoresist' is a photosensitive liquid applied to silicon wafers and is a core semiconductor material used for drawing circuits.
TOK is the world's leading photoresist manufacturer, holding the largest market share and supplying companies such as Samsung Electronics, SK Hynix, TSMC, and Intel. TOK Advanced Materials is TOK's Korean subsidiary. The construction of the TOK Advanced Materials Pyeongtaek plant is a direct result and follow-up action to the Memorandum of Understanding (MOU) for investment attraction, which Gyeonggi Governor Kim Dong-yeon personally signed during his visit to TOK's headquarters in Kanagawa Prefecture, Japan, in April 2023.
With the establishment of TOK's manufacturing facility in the Poseung area, a gateway to the West Coast, the province anticipates a significant increase in the self-sufficiency rate of critical semiconductor materials for domestic global semiconductor companies such as Samsung Electronics and SK Hynix.
Notably, at the groundbreaking ceremony, TOK CEO Taneichi Noriaki, in his commemorative speech, announced plans for the construction of a second plant following the current Pyeongtaek Plant 1, and requested active support from Gyeonggi Province and Pyeongtaek City. In response, Gyeonggi Governor Kim Dong-yeon affirmed, stating, "We will provide all administrative and policy support," and urged them to "play a larger role as a member of Korea's semiconductor ecosystem."

3. SK Hynix Initiates Mass Production of World’s First 321-Layer QLC NAND, Targeting AI Data Centers

- Double capacity, 100% faster transfer speed than previous generation
- Full launch expected early next year to accelerate data center market penetration
SK Hynix has set a new milestone in memory semiconductor technology. The company has become the first in the world to commercialize its 321-layer QLC (Quadruple Level Cell) NAND flash, surpassing the 300-layer barrier, positioning itself to preemptively secure a leading position in the rapidly growing global Artificial Intelligence (AI) data center market.
On the 25th, SK Hynix announced the completion of development for its 321-layer 2-terabit (Tb) QLC NAND flash product, which boasts the highest integration density currently available, and has commenced mass production. This marks the industry's first QLC product to surpass the 300-layer threshold and is regarded as presenting a significant new turning point in the advancement of memory semiconductor technology.
QLC technology, which allows for storing four bits of information per memory cell, is optimally suited for high-capacity storage solutions due to its ability to process more data within the same physical area. SK Hynix has developed this new product with a capacity of 2Tb, doubling that of previous generations, thereby maximizing its cost competitiveness.
What is particularly noteworthy is that the company has resolved the inherent performance degradation challenges that typically arise during high-capacity scaling through its proprietary technological capabilities. Specifically, the company has significantly enhanced its parallel processing capabilities by expanding its independent operating units, 'Planes,' from four to six—a 50% increase.
As a result, data transfer speed was improved by 100%, with write performance increasing by up to 56% and read performance by 18%. Furthermore, data writing power efficiency also increased by over 23%, optimizing it for AI data center environments where low power consumption is crucial.
SK Hynix is committed to expanding its global market share through a systematic market entry strategy. The company plans to initially apply its 321-layer NAND to Solid-State Drives (SSDs) for PCs, subsequently expanding its application to enterprise SSDs (eSSDs) for data centers and Universal Flash Storage (UFS) products for smartphones.
Furthermore, by utilizing its proprietary 32-die Package (32DP) technology, which stacks 32 NAND dies at once, the company plans to achieve twice the density compared to conventional methods, thereby accelerating its entry into the ultra-high-capacity eSSD market for AI servers.
This product, currently finalizing its global customer certification process, is slated for full-scale release starting in the first half of next year.
Industry analysts anticipate that, given the rapid proliferation of generative AI services like ChatGPT, and the exponential surge in demand for high-capacity, high-performance memory, SK Hynix's latest technological innovation will serve as a significant turning point in the global AI semiconductor competitive landscape.


Ⅲ. BATTERY INDUSTRY TREND

1. SK On and Ford’s Joint Venture Begins EV Battery Production in the U.S.

BlueOval SK, the electric vehicle (EV) battery production joint venture between SK On and Ford Motor Company, commenced its first commercial production on the 20th.
According to SK On and foreign media reports, BlueOval SK's Kentucky Plant 1, located in Glendale, Kentucky, has initiated the manufacturing of batteries with an approximate capacity of approximately 37 GWh. These batteries are designated for Ford's electric pickup truck, the 'F-150 Lightning,' and the 'E-Transit' electric cargo van. Furthermore, this facility is also projected to produce batteries for future EV models from both Ford and Lincoln.
In July 2022, SK On and Ford established BlueOval SK, committing to an investment of $11.4 billion (approximately KRW 16 trillion) for the construction of three battery plants across two locations: Glendale, Kentucky, and Stanton, Tennessee. The Tennessee plant is currently slated to begin operations next year, while the exact operational timeline for the Kentucky Plant 2 has not yet been determined.
With the activation of the Kentucky Plant 1, SK On is now able to further expand its production capacity within the United States, in addition to its existing plant, 'SK Battery America,' located in Georgia. SK Battery America, which began production in 2022, is reportedly operating its battery cell production lines at 100% capacity.
Michael Adams, CEO of BlueOval SK, stated, "The start of production at Kentucky Plant 1 marks a crucial milestone that will further strengthen our position in the electric vehicle battery market."

2. POSCO Future M Targets Next-Gen Battery Market with High Performance, High Stability Cathode Materials

- Aiming for premium EV and UAM markets with enhanced energy density and stability
- Simultaneous achievement of performance and cost competitiveness through single-crystal and high-voltage technologies
POSCO Future M has achieved significant advancements in developing core materials for next-generation batteries, specifically targeting premium electric vehicles (EVs) and Urban Air Mobility (UAM) applications.
On the 21st, POSCO Future M announced the successful pilot development of both ultra-high-nickel cathode materials and high-voltage mid-nickel cathode materials.
The ultra-high-nickel cathode material is a premium-grade material designed to maximize energy density by elevating its nickel content to over 95%. This enables a significant improvement in driving range performance compared to existing N8x products (with nickel content over 80%). However, due to its high nickel concentration, it inherently presents limitations regarding thermal stability and lifespan.
To compensate for these limitations, POSCO Future M explained that they strengthened stability by integrating key raw materials into a single-crystal structure, along with applying surface coating and adding auxiliary materials. Furthermore, the company stated that it has secured cost competitiveness by improving the productivity of its calcination process.
The high-voltage mid-nickel cathode material reduces material costs by lowering its nickel content to approximately 60% while addressing potential energy density challenges through the application of high voltage. By increasing the manganese ratio and incorporating single-crystallization technology, it minimizes the contraction and expansion that occur during charging and discharging, thereby ensuring enhanced safety. Furthermore, its price competitiveness has been elevated through the utilization of non-precipitation precursors, lithium carbonate, and a reduced proportion of nickel and cobalt.
A POSCO Future M official stated, "We plan to secure mass-production technology to ensure timely production and supply in response to requests from the automotive and battery industries concerning the developed products." The official further added, "Through the group's Future Technology Research Institute, we will continue research and development for next-generation materials, including lithium sulfide, solid electrolytes, and lithium metal anode materials."

3. SK On and EcoPro Collaborate to Establish Closed-Loop Battery Recycling Ecosystem

- Supply contract signed for ‘Black Powder,’ the ‘crude oil of batteries’
- Resupply after recycling: building a circular business model
EcoPro and SK On are actively advancing efforts to establish a comprehensive battery circular ecosystem.
Both companies announced on the 24th that they finalized a 'Battery Circular Ecosystem Memorandum of Understanding' alongside a BlackPowder supply agreement at EcoPro's Seoul office.
Through this agreement, EcoPro and SK On are set to establish a comprehensive battery circular ecosystem that spans the entire process from waste battery recycling to the production of cathode materials.
Under the terms of this contract, EcoPro CNG, the EcoPro Group subsidiary responsible for battery recycling, will procure black powder derived from discarded battery scrap directly from SK Battery America (SKBA), SK On's U.S. subsidiary.
This marks the first instance of EcoPro CNG receiving high-quality black powder directly from SK On. The supply volume is set at 200 tons per month, with the contract period spanning five years, from this year until 2029.
EcoPro CNG is to process this material at its Pohang facility, manufacturing cathode materials which will then be delivered back to SKBA. This partnership will concurrently expand EcoPro CNG's raw material supply source to the United States.
As the electric vehicle era advances, the establishment of a 'circular ecosystem recycling business model' is emerging as a critical competitive advantage for companies within the battery value chain
Black powder refers to the fine, dark substance produced by crushing secondary battery scrap (defective products) and spent batteries. This substance is often likened to the 'crude oil of batteries' due to its concentrated content of critical metallic elements like lithium, nickel, cobalt, and manganese, all essential for secondary battery production.
Based on this partnership, both companies plan to expand the types of materials and regions targeted for their operations, thereby strengthening their global waste battery recycling value chain.
EcoPro CNG is a specialized waste battery recycling company, equipped with both pre-treatment (dry) and post-treatment (wet) process technologies and facilities. Pre-treatment involves discharging and disassembling waste batteries, removing impurities, and then producing black powder.
Post-treatment is the process of dissolving black powder in sulfuric acid to directly extract valuable metals.


Ⅵ. ELECTRIC VEHICLE INDUSTRY TRENDS

1. South Korea’s Automotive Sector Experiences ‘Triple Growth’ in July. EV Sales Reach Record-high.

- Domestic EV sales surpass 25,000 units, comprising 18.5% of internal market
- Eco-friendly vehicles secure over 55% of local sales, solidifying majority
South Korea's automotive industry commenced the second half of the year on a robust note in July, exhibiting year-over-year increases across all key metrics: exports, domestic sales, and production. Notably, the accelerating shift towards environmentally friendly vehicles was evident as domestic electric vehicle (EV) sales achieved an unprecedented market share.
Last month, automobile exports increased to 212,000 units, marking a 5.8% increase compared to the same month last year. Domestic sales expanded by 4.6% to 138,000 units, while production volume saw an 8.7% rise, reaching 316,000 units. The total export value also recorded a significant 8.8% increase, amounting to $5.83 billion.
Domestic EV sales surged significantly to 25,568 units, marking a 69.4% increase compared to the same period last year. This pushed the EV share of total domestic sales to a record high of 18.5%. Furthermore, overall eco-friendly vehicle sales reached 77,000 units, constituting 55.3% of the entire domestic market— marking the second time this year, following May, that exceeded half of all sales. Hydrogen fuel cell vehicle sales also experienced substantial growth, with 1,045 units sold, a 161.3% rise year-on-year, largely attributed to the launch effect of the new Nexo model.
In July, while automotive exports to the U.S. market experienced a 4.6% decline, notable increases were recorded in other regions. Shipments to the European Union (EU) grew by 32.7%, other European countries by 78.7%, and Asia by 34.6%. Particularly strong surges in exports of eco-friendly and used vehicles were observed in Germany (+67.9%), Sweden (+215.0%), and Turkey (+471.7%). However, exports to the Middle East saw a 13.8% reduction, attributed to the ongoing impact of the Israel-Iran conflict.
Eco-friendly vehicle exports increased by 17.0% to 68,000 units, with both hybrid and plug-in hybrid models continuing to perform strongly. EV exports reached 20,000 units, marking an increase for two consecutive months. However, the export value for EVs saw a 4.1% decline, primarily due to an increased proportion of more affordable models being shipped.
Regarding production performance figures, Hyundai manufactured 138,000 units, and Kia produced 126,000 units. GM Korea recorded 31,000 units, representing a 59.9% year-on-year increase, primarily due to a favorable base effect from last year's wage negotiations. Renault Korea also demonstrated a strong recovery, with production more than doubling to approximately 10,000 units.
The government has assessed that the automotive and parts tariff negotiations between South Korea and the U.S., concluded in late July, have significantly mitigated uncertainties concerning exports to the U.S. market. An official from the Ministry of Trade, Industry and Energy affirmed, "We will persist in providing diverse support, including financial assistance, technological development, and new market exploration, to ensure our domestic automotive industry can swiftly adapt to the evolving trade landscape and secure its future growth momentum."

2. Chinese-made EVs Gaining Momentum in South Korean Market

- Tesla’s China-manufactured model Y&3 lead sales; BYD surpasses 1,000 units
- ‘Value for money’ strategy drives Chinese brands; Hyundai Ioniq 5 and Torres EVX face sales challenges
Vehicles manufactured in China are quietly expanding their market share within South Korea's EV sector. Despite a common negative perception among consumers toward 'Made in China' products, market analysis reveals that American EV brands produced in China are achieving top sales positions, while Chinese brands are also finding success through their cost-effective strategies.
According to Carisyou Data on the 19th, Tesla recorded sales of 26,585 units between January and July this year, marking a substantial 174.7% increase compared to the same period last year. This performance positioned Tesla as the third best-selling imported automotive brand, following BMW (44,772 units) and Mercedes-Benz (37,026 units).
The surge in sales was predominantly derived by the Model Y and Model 3. During the same period, the Model Y alone sold 21,991 units, achieving the top rank for imported single models. The Model 3 also secured the fifth position with 4,430 units sold. Although Tesla is an American brand, it is important to note that both the Model Y and Model 3 are manufactured in China. This trend suggests that the country of origin for production has not been a decisive factor in South Korean consumer purchasing decisions.
Instead, the 'value for money' proposition inherent in Chinese manufacturing appears to be a key competitive strength. The Model Y, for example, has effectively minimized potential price increases by leveraging its production in China, solidifying its status as a prime 'cost-effective' model within the domestic market.
An industry insider remarked, "For South Korean consumers, the crucial elements are brand credibility and price competitiveness, rather than the manufacturing location. Tesla's case clearly shows that the 'Made in China' aspect isn't a significant deterrent."
BYD, a prominent homegrown Chinese brand, is also gaining success by championing its competitive pricing. The Atto 3 model, introduced this year, has proven to be a highly attractive 'value-for-money' option, with 1,585 units sold. Its affordability, bringing the purchase price into the late 20 million won range after subsidies, has been a key factor. The vehicle notably captured significant industry attention during its initial market release, with 543 units sold in April and 513 in May. However, sales figures experienced a noticeable decline, roughly halving in June (214 units) and July (254 units), indicating a slight slowdown in its initial growth trajectory.
BYD is poised to rekindle the 'value-for-money' appeal with its electric sedan, the 'Seal,' set for launch in the latter half of the year. With subsidies, the Seal's anticipated effective purchase price is positioned at around 43 million won, making it roughly 5 million won more economical than its directly competing domestic counterparts.
The assertive expansion of Chinese EV manufacturers shows no signs of slowing. Brands such as Zeekr, Changan, and Xpeng are also actively preparing for their entry into the South Korean market. Notably, Zeekr has officially announced its domestic launch by the end of this year. As Zeekr is positioned as a premium brand in China, it will be keenly observed whether it can successfully transcend the 'Chinese = value for money' perception that typically prevails in the Korean market. However, some analysts remain skeptical about its success, noting that Korean consumers may not yet be ready to accept Chinese EVs as luxury brands.

3. Hyundai EVs to Feature ‘World’s First Battery’

Hyundai Motor Group is reviewing a plan to integrate the world's first-developed 'mid-manganese battery' into its EVs. This move aims to commercialize a proprietary battery that will replace LFP batteries, as China expands its presence in the global EV and battery markets with its affordable LFP (Lithium Iron Phosphate) batteries. Secondary batteries constitute 40% of an EV’s manufacturing cost. This is interpreted as a strategy to enhance competitiveness in the mass-market EV segment through the expanded application of next-generation low-cost batteries. Furthermore, these batteries are anticipated to be utilized in new growth engines such as humanoid robots and Urban Air Mobility (UAM).
Hyundai Motor Group is currently conducting performance tests on mid-manganese battery samples that have not yet been commercialized.
The mid-manganese battery is characterized by its enhanced price competitiveness, achieved by increasing the proportion of inexpensive manganese to over 45% among its main raw materials, NCM (nickel, cobalt, manganese). The core cathode material technology for the mid-manganese battery was developed as the world's first by a research team led by Professor Yang-Kook Sun of Hanyang University's Department of Energy Engineering, a leading scholar in Korea, after four years of dedicated effort. This technology was recently published in 'Nature Energy,' the world's most prestigious energy academic journal.
Mid-manganese battery is projected to be a strong contender against Chinese-made LFP batteries, for which global demand is rapidly growing. This is because it boasts 40-65% higher energy density by weight compared to Chinese LFP batteries, while also offering 30-40% cost reduction relative to high-nickel alternatives. While their price is comparable to LFP batteries, they essentially surpass LFP in terms of performance and stability. Also, with the U.S. and the European Union (EU) pushing policies to exclude Chinese-made battery supply chains, the mass production of next-generation low-cost batteries that can replace LFP batteries is an urgent necessity. Professor Sun predicted, "Mid-manganese is an entirely novel, original technology that complements the drawbacks of lithium-rich LMR (Lithium-Manganese-Rich) batteries. Since it can be produced on existing NCM battery lines, commercialization could be possible as early as next year."


Ⅴ. BIO INDUSTRY TRENDS

1. SK Bioscience Discusses Enhanced Cooperation with Gates Foundation for Global Health Advancement

- Expanding scope of mutual collaboration based on global public health projects
SK Bioscience held an exclusive meeting with the Gates Foundation on the 20th in Yeouido, Seoul, in anticipation of a visit to Korea by Bill Gates, founder of the world's largest non-profit organization. During this session, the parties discussed collaboration strategies aimed at advancing global health initiatives.
The meeting was attended by key foundation officials, including Trevor Mundel, President of Global Health for the Gates Foundation, along with Chang-won Chey, Vice Chair of SK Discovery, and Jae-yong Ahn, CEO of SK Bioscience.
Through this meeting, SK Bioscience and the Gates Foundation reaffirmed their long-term partnership and committed to further broadening the scope of their mutual cooperation in the future, building upon their ongoing vaccine development and global public health projects.
Notably, SK Bioscience conveyed that they reviewed expanded collaboration proposals focusing on next-generation preventive medicine research and development tasks, including ongoing vaccine development in preparation for future pandemics.
Meanwhile, SK Bioscience and the Gates Foundation have maintained a cooperative relationship since 2013, addressing global public health challenges through various initiatives such as the development of diverse vaccines for typhoid and pediatric enteritis, as well as antiviral preventive solutions.
South Korea's first domestically developed COVID-19 vaccine, which was successfully developed and commercialized in 2022, stands as a successful example of collaboration between the two organizations. Following this achievement, Chairman Bill Gates and Trevor Mundel, President of Global Health, visited Korea that year to deliver congratulatory messages and held separate meetings with figures such as SK Group Chairman Tae-won Chey and SK Discovery Vice Chairman Chang-won Chey.

2. Korean Biopharma Firms Accelerate to Secure North American Production Base

- GC subsidiary secures cell therapy manufacturing facility in New Jersey, U.S.
- SK Pharmteco and others also bolster U.S.-based cell therapy production
- High-value cell therapy market entry. Driven by IRA, and Tariff concerns.
South Korean bio･pharmaceutical companies are actively accelerating investments to secure production bases in the United States and North America. This strategy aims to directly target the world's largest market, the U.S., locally, while simultaneously responding to global protectionism, the U.S. Inflation Reduction Act (IRA), and the threat of high tariffs.
Made Scientific, the U.S. subsidiary of GC (Green Cross Holdings), inaugurated its new Good Manufacturing Practice (GMP) manufacturing facility and U.S. headquarters in Princeton, New Jersey, on the 13th of this month (local time). This represents a Phase 1 investment totaling $12 million (approximately KRW 16.7 billion). Made Scientific has now secured comprehensive production capabilities, covering the entire lifecycle from clinical development to commercialization within the rapidly expanding cell therapy market. The company further plans a Phase 2 expansion for the factory, intending to hire over 100 additional specialized personnel and expand its GMP cleanroom space by approximately 1,200 square meters (about 363 pyeong). SK Pharmteco, SK's pharmaceutical Contract Development and Manufacturing Organization (CDMO) subsidiary, also strengthened its local supply chain in 2023 by becoming the largest shareholder of CBM, a U.S.-based CDMO recognized for having the world's largest cell and gene therapy production capacity.
Cell and gene therapies, for which Korean companies are successively establishing production bases in the U.S., are advanced treatments that directly utilize a patient's own cells or genes as therapeutic agents. Their production is complex, and long-distance transportation is difficult, making local production hubs essential. These therapies are highly valuable, with prices commanding hundreds of millions of Korean Won, and the sector is projected to experience high annual growth exceeding 30%. Companies that secure related production facilities early are likely to gain future leadership, thus accelerating their entry into the high-demand U.S. market. Furthermore, the U.S. government is focusing tax benefits and subsidies through the IRA on companies that promote domestic production and job creation. With the Donald Trump administration also hinting at the imposition of high tariffs, increasing uncertainty for externally produced pharmaceuticals, there is a competitive drive to establish local production facilities.
An industry official projected, "On-site production in the U.S. has evolved beyond mere regulatory compliance or market accessibility to become a survival strategy. Korean companies are expected to achieve a significant leap forward on the global stage by leveraging their North American bases."
Furthermore, the plans for U.S. production by Celltrion and Samsung Biologics, considered the two pillars of South Korea's biopharmaceutical industry, are gradually taking concrete form. Celltrion, for instance, is actively pursuing the acquisition of a large-scale biopharmaceutical plant in the U.S. with an investment of approximately 700 billion won. This local production strategy aims not only to address the U.S. government's tariff policies but also to expand the market share of its biosimilars.

3. Samsung Biologics Signs KRW 88.4 Billion Contract Manufacturing Deal with European Pharmaceutical Firm

Samsung Biologics made a public announcement on the 26th that it has secured a new contract manufacturing deal with a European pharmaceutical firm.
According to the official disclosure, Samsung Biologics signed a CMO agreement valued at 88.4 billion won with the Europe-based company. This contract represents 1.94% of the company's annual revenue from the previous year, which stood at 4.5473 trillion won.
The contract term runs from the effective date until the end of 2031, with the termination date subject to adjustment by mutual agreement of both parties.
Further specifics, including the identity of the contracting party, will be revealed on December 31, 2031, citing confidentiality requirements for business secrets.
Having already secured orders totaling 3.3550 trillion won in the first half of this year, Samsung Biologics plans to actively pursue additional contracts in the latter half.
　

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Korean Industrial Insight No.18 of AI, Semiconductors, Batteries, Electric vehicles, and Bio in chinese