South Korean industries are increasingly alarmed by what is being referred to as China’s ‘technology invasion,’ as Chinese firms aggressively expand their footprint across multiple domestic market sectors. (Image courtesy of Yonhap)
SEOUL, Feb. 2 (Korea Bizwire) — The rapid advancement of Chinese technology and its increasing presence in South Korean industries have sparked growing concerns among domestic businesses, particularly following the global impact of China’s low-cost, high-performance AI model, DeepSeek.
For years, Chinese products were largely perceived in South Korea as inexpensive but inferior in quality. However, this perception is shifting as Chinese companies dominate sectors such as robotic vacuum cleaners and other consumer electronics.
Now, as Chinese firms aggressively expand into semiconductors, electric vehicles, and batteries—industries crucial to South Korea’s economic competitiveness—unease is spreading across the domestic industrial landscape.
Chinese Companies Gain Ground in Key Industries
China’s presence in the South Korean robotic vacuum cleaner market exemplifies its growing influence. Roborock, a Chinese brand, has overtaken local competitors and now holds the largest market share in South Korea, challenging the traditional notion of Chinese products being solely budget-friendly. The company’s premium models, priced around 1.5 million won ($1,030), have been well received by South Korean consumers.
Chinese home appliance makers are also ramping up their presence. Roborock introduced an all-in-one washer-dryer to compete with market leaders Samsung and LG, and Xiaomi recently established a South Korean subsidiary, planning to roll out smartphones, TVs, wearables, and other consumer electronics.
South Korean firms are bracing for what industry executives describe as a “tsunami” of competition. LG Electronics CEO Cho Joo-wan emphasized at a recent press conference that the company has moved beyond acknowledging the Chinese threat and is now actively executing strategies to counter it.
DeepSeek is a Chinese artificial intelligence company that develops open-source large language models (LLM). (Image: DeepSeek logo)
Security Concerns and Strategic Responses
Amid the influx of Chinese products, security vulnerabilities have emerged as a key concern. In response, Samsung Electronics is expanding its blockchain-based security system, Samsung Knox Matrix, across all connected devices, including TVs and home appliances.
Meanwhile, LG Electronics is integrating its proprietary LG-SDL security development process and LG Shield system into all networked products from the initial development stage.
In the semiconductor and battery sectors, Chinese firms’ aggressive pricing has intensified competition. Companies like ChangXin Memory Technologies (CXMT) and Fujian Jinhua Integrated Circuit (JHICC) are flooding the market with low-cost memory chips, causing a steep decline in prices for legacy products that Samsung and SK Hynix have long dominated.
In response, South Korean chipmakers are accelerating their transition to cutting-edge high-performance memory, such as High Bandwidth Memory (HBM), to maintain profitability.
Meanwhile, South Korea’s battery giants—LG Energy Solution, SK On, and Samsung SDI—are struggling against Chinese competitors like CATL. South Korea’s battery market share dropped below 20% last year due to China’s cost-efficient vertical supply chain integration.
To counter this, domestic battery firms are diversifying their product portfolios and client bases, offering a wider range of battery chemistries and form factors.
BYD’s compact electric SUV, the Atto 3 (Image courtesy of Cheil Worldwide)
The Auto Industry Faces a New Challenge
The South Korean automotive sector, traditionally shielded from Chinese competition due to strong brand loyalty and skepticism about Chinese vehicle quality, is also beginning to feel pressure.
BYD, the world’s top electric vehicle (EV) maker, has officially entered the South Korean market, launching its Atto 3 model at a competitive price of around 30 million won ($20,580).
If BYD’s strategy proves successful, other Chinese EV brands like Zeekr and Xiaopeng may follow, triggering increased competition for Hyundai and Kia. In anticipation, Hyundai Motor Group is preparing countermeasures, including releasing long-range, high-design electric models like the Kona Electric and Kia EV3.
The company is also strengthening partnerships with global automakers such as Toyota and GM to curb China’s expansion.
Shipbuilding: A Sector Poised for Opportunity
Despite concerns in many industries, South Korea’s shipbuilding sector could benefit from China’s rise. While China has surpassed South Korea in total ship orders—claiming 71% of global market share last year—South Korea remains the dominant player in high-value ships, such as LNG carriers.
Washington’s increasing concerns over China’s naval expansion may further boost South Korea’s shipbuilding industry. With Donald Trump returning to the U.S. presidency, his administration has signaled greater collaboration with South Korea, particularly in naval construction and maintenance under the Shipbuilding and Port Facilities Act.
Experts believe these developments could provide substantial opportunities for South Korea’s shipbuilding sector amid heightened U.S.-China tensions.
This photo provided by Hanwha Group shows a panoramic view of Philly Shipyard Inc. in Philadelphia, Pennsylvania. (Image courtesy of Yonhap)
Strategic Collaboration Needed
Industry experts emphasize the importance of strategic partnerships to counter China’s growing influence. Yang Jong-seo, a researcher at the Export-Import Bank of Korea, noted that restrictions on China could push global clients toward South Korean shipbuilders. “The U.S. demand for shipbuilding cooperation and maritime security could open significant new doors for the South Korean industry,” he said.
As China’s technological and industrial presence continues to grow, South Korea’s response will be crucial in determining whether it can maintain its competitive edge or be overshadowed by its fast-rising neighbor.
Ashley Song (ashley@koreabizwire.com)
