China and South Korea can leverage their complementary strengths in semiconductors and artificial intelligence technologies to advance cooperation and bolster Asian supply chains to create solutions that will benefit the world, investors and industry experts said.

With South Korea now pushing for a "three mega projects" initiative centered on semiconductors, physical AI and AI data centers, Hong Kong and Shenzhen-based Sparks Physical AI Ventures founding and managing partner Tony Chen and managing partner Jayesh Chhatlani, said they foresee more business opportunities for cooperation between firms and investors from China and South Korea.

For example, South Korea's strength in memory chips can be combined with China's strengths in commercialization and application to turn memory-as-a-service into a driver of wider adoption of AI, said Chen, adding that cooperation in agricultural and food tech, AI-enabled entertainment content, and industrial automation are also potential sectors for cooperation.

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"By leveraging Chinese AI solutions and the market demand from South Korea when we co-create one solution together, it can be deployed to many other countries in Asia," said Chen, mentioning that he recently introduced a South Korean company to a Chinese robotics company to develop agricultural tech solutions not only for South Korea but also potentially for Indonesia.

In June, Chen traveled to South Korea to meet with investors and companies in the physical AI industry. During the meetings, Chen said he noticed growing interest among South Korean industry players in building partnerships with Chinese companies, especially in the physical AI sector, such as robot components and modules including sensors, motion control, and scalable hardware integration.

Some companies are also interested in learning from China's speed in AI commercialization, deployment, and smart devices, he said.

"China remains a very important market and a key cooperative partner for South Korea's semiconductor industry," Kim Seo-gyun, chief strategy officer at Sembricon Technologies and vice-president of the Korea-China Institute of Digital Economy, told China Daily.

Noting that China remains the world's largest manufacturing base for electronic products and the largest semiconductor consumption market, he said the demand from China for semiconductors continues steadily across diverse industries, presenting an important growth opportunity for South Korean companies.

South Korea's monthly exports topped $100 billion for the first time in June, up about 70 percent, according to data released by the country's Ministry of Trade, Industry and Resources.

The growth was mainly driven by semiconductor exports, which rose 200 percent. Notably, exports to China, which jumped 92 percent, marked eight consecutive months of growth, as shipments of semiconductors, the top export item, more than tripled.

As future competition in AI is about global supply chains and ecosystems, not just countries, Kim said South Korea and China are highly complementary in AI and semiconductors, and that both countries can benefit from the AI-driven innovation while navigating global supply chain competition by deepening joint research and development and forming strategic partnerships.

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He said he believes that enhancing cooperation based on mutual trust and the perspective of "competitive cooperation" — where competition and collaboration coexist — will contribute positively to the sustained growth of both countries' industries and to the development of the global semiconductor ecosystem.

Noting there has been an asymmetry of information in South Korea regarding the diverse ecosystem of China's AI industry, Chen said he will bring Chinese robotics and AI companies to South Korean market players.

Contact the writers at kelly@chinadailyapac.com