On July 27, China's memory semiconductor company ChangXin Memory Technologies (CXMT) listed on the STAR Market of the Shanghai Stock Exchange, often referred to as China's NASDAQ. On its first day of trading, CXMT's stock price surged by a staggering 4.7 times above its offering price, instantly rising to become the largest company in China's stock market by market capitalization. It was the largest initial public offering (IPO) in Asia in 2026, and its ripple effects caused fluctuations in both the KOSPI and the Philadelphia Semiconductor Index (SOX). The earnings report released at the end of August delivered a significant earnings surprise, far exceeding market expectations. First-half revenue surged more than eightfold compared to the same period last year, and the company successfully turned a large profit. CXMT, which has mobilized all of China's government funding and policy support for its semiconductor resurgence, was established in 2016 with capital investment from Hefei, a local government. Since its listing, the stock price has risen significantly, and as of early September, its market capitalization is approaching 800 trillion won, maintaining its position as the top company on mainland China.
Thanks to rapid capacity expansion and China's strong policy of semiconductor self-sufficiency, CXMT has achieved a 7% share of the global DRAM market, ranking fourth. Its production capacity based on global wafer input is nearing 13%. Major investment banks such as Goldman Sachs project that CXMT will absorb nearly half of China's domestic DRAM demand by 2028. This indicates that the landscape of China's memory semiconductor market, where Samsung Electronics and SK Hynix have long maintained competitiveness, may undergo a structural shift.
On August 11, quantum technology company Guoyi Quantum (CIQTEK) also listed on the STAR Market. Specializing in the development of electron microscopes and quantum precision measurement equipment, CIQTEK's stock price surged by 419.5% on its first day of trading. This was another result of combined capital and policy support from the Hefei local government. Subsequently, on August 19, humanoid robot company Unitree listed on the STAR Market. Its stock price soared as high as 629% during trading on the listing day, and it received approval just 73 days after submitting its preliminary review application, setting a record for the shortest time to list on the STAR Market. Agibot, a humanoid startup founded by Peng Zhihui (), known as Huawei's "genius boy," is also expected to list on the Hong Kong stock market this year. The rapid growth of Unitree and Agibot symbolizes China's rise in the robotics industry.
Yangtze Memory Technologies Corp. (YMTC) has also submitted an application for listing on the STAR Market. YMTC's rise, which has rapidly gained market share in the NAND flash market while building an independent semiconductor ecosystem amid U.S. export sanctions, is another example showing that China is quickly narrowing the technology gap with South Korea in memory semiconductors.
In the shipbuilding industry as well, China's pursuit is no longer limited to low-cost vessels relying solely on low-wage labor. It is rapidly enhancing competitiveness by leading digital transformation, eco-friendly and high-value-added ships, and domestic production of key equipment. Shipyards under China State Shipbuilding Corporation (CSSC) are boosting productivity using a "no-drydock construction system" based on 3D digital modeling, along with 5G and AI-powered automatic welding and painting robots. As a result, they are quickly securing design and construction capabilities for high-value-added vessels ranging from ultra-large LNG carriers to methanol- and ammonia-fueled container ships and ultra-large cruise ships. Symbolically, as of July 2026, Chinese shipyards received orders for 34 LNG carriers, surpassing South Korea's 32 for the first time.
It is difficult to explain the simultaneous rise of Chinese companies across such diverse industries merely as the success of individual firms. Behind this lies China's innovation equation, designed by the state and propelled by capital, known as "Chinnovation." The engines driving Chinnovation are primarily fourfold: First, a negative regulation approach that prioritizes pre-approval for emerging industries like autonomous driving and AI, followed by post-regulation. Second, a vast domestic market where digital platforms and e-commerce such as Alipay, WeChat Pay, Temu, and Shein have taken root. Third, long-term national R&D investment supporting the electric vehicle and battery industries, exemplified by BYD and CATL. Finally, a dense manufacturing ecosystem centered in Shenzhen that connects planning, prototyping, to mass production (Yangsan) in an extremely short timeframe. The core of Chinnovation lies in bundling capital, market, manufacturing, and regulation into a single system to accelerate the pace of innovation.
Especially noteworthy is that this growth is occurring even under strong external constraints, such as U.S. export sanctions on advanced semiconductors and AI. China's true competitiveness does not lie solely in the size of subsidies or the technological prowess of individual companies. It lies in its ability to combine government capital, domestic markets, manufacturing ecosystems, and regulatory environments to drastically shorten the cycle from technology development → market validation → mass production → price reduction. In essence, it is turning the speed at which it narrows the technology gap into a competitive advantage itself. The reason China's competitiveness is so formidable is not because a single company has surpassed Korean firms. Rather, it is because this is happening simultaneously across diverse industries such as semiconductors, robotics, shipbuilding, electric vehicles, and quantum technologies. This is evidence that China has established a single competitive equation to rapidly narrow technology gaps in multiple key industries.
In the process of intensifying unprecedented hegemonic competition between the U.S. and China alongside the offensive of Chinnovation, South Korea's industrial sector faces severe structural double pressure known as the "Red Sandwich Crisis." In the past, South Korea's sandwich position meant being squeezed between Japan and China: pressured by Japanese technology on one side and Chinese prices on the other. However, the situation has now changed. A single China is now pressing from above with technology and from below with price simultaneously.
From below, it is aggressively launching price attacks in general-purpose DRAMs, quadruped robots, drones, and other areas, leveraging massive policy support and economies of scale to encroach on South Korea's major markets. Meanwhile, from above, it is rapidly narrowing the technology gap in advanced NAND, next-generation DRAMs, commercial humanoid robots, eco-friendly and autonomous ships, and other sectors, thereby threatening even the high-value-added markets where South Korea has long maintained its strengths.
Of course, this does not mean that all Chinese industries will immediately surpass South Korea. Significant gaps still exist in core foundational technologies, global trust, quality stability, and supply chain networks. The issue is not the existence of these gaps but the speed at which they are being narrowed. In some industries already, the competitiveness of Chinese-made components and materials has risen, leading to changes in existing supply chains and business models for Korean companies. As Chinese companies increasingly adopt domestically produced components, the pricing power and profitability that Korean firms have enjoyed may come under greater pressure. If this trend is left unchecked, there is a risk that South Korea's key manufacturing industries, including semiconductors, could lose their competitive edge in both technology and price, potentially devolving into simple production bases.
The "Red Sandwich Crisis" brought by Chinnovation serves as a warning that South Korea must rewrite the success equation that once supported its industrial growth. Merely trying to block China is not enough. The speed at which we move toward new technologies and markets must exceed the pace at which China catches up. Instead of engaging in price competition with China in the same markets, South Korea must create a new gap by focusing on areas where China cannot catch up quickly in the short term, such as next-generation memory like HBM4 and CXL, and advanced packaging. At the same time, a de-risking strategy is needed that strictly selects additional investments in existing production facilities within China while concentrating new advanced investments and capabilities in next-generation fine-process R&D and advanced packaging on key domestic hubs.
Creating a gap is not just a slogan. It is about how quickly we can seize the next technology and the next market before China catches up. The golden time to break through this massive encirclement known as the Red Sandwich is not very long. The government must accelerate innovation through negative regulation, while companies must secure safety nets for their supply chains through friend-shoring and selective de-risking.
What determines South Korea's future is not how much we can block China. It depends on how quickly we can move to the next industry and the next technology before China catches up. Creating a gap is not about defending existing positions but about proactively leaping forward by continuously generating new gaps.
in OPINION
