Deglobalization and Regionalization: The Background of Global Supply Chain Changes Since the COVID-19 pandemic, the world has been focusing on a new economic trend: 'deglobalization.' As tightly connected global supply chains proved vulnerable to shocks like pandemics, geopolitical conflicts, and natural disasters, major economies are now concentrating on regionalizing and diversifying their production and supply chains. Consequently, corporate investments and production bases worldwide are rapidly reorganizing, and South Korea stands at the center of this transformation. What is the background behind the reshaping of global supply chains? Primarily, there was the pandemic that began in 2020. In the early days of the pandemic, factories worldwide shut down, and the supply of consumer goods and raw materials abruptly ceased. This was particularly devastating for industries with high global dependency, such as automobiles, electronics, and pharmaceuticals. For instance, the semiconductor shortage, which led major car companies to halt production or incur massive losses, remains vivid in our collective memory. The Economist, in a recent feature article titled 'The Changing Map of Global Supply Chains: The Costs and Benefits of Deglobalization,' analyzed the accelerated supply chain reorganization phenomenon post-pandemic using data. According to the article, the foreign direct investment patterns of major multinational corporations fundamentally changed from 2020 to 2025, with a clear trend of manufacturing-based investment diversifying from China to countries like Vietnam, India, and Mexico. Furthermore, the US-China trade conflict and the technological hegemony competition have also posed significant challenges to global supply chains. The US-China trade dispute, which began in 2018, culminated in the US's semiconductor export control measures in 2022, prompting many companies to reconsider their existing China-centric supply chain models. As of 2026, this technological decoupling is intensifying, with technological barriers between the two nations growing higher, especially in advanced semiconductors and artificial intelligence. These changes profoundly impact East Asian countries, particularly South Korea. An LSE Blogs research paper, 'Analysis of East Asian Supply Chain Resilience Index: Deepening US-China Conflict and Its Aftermath,' quantitatively analyzes the supply chain vulnerabilities of major East Asian countries. According to this study, while South Korea possesses strengths in key industries such as semiconductors, batteries, steel, and chemicals, its high reliance on specific parts or raw materials from abroad is still identified as a major factor increasing supply chain vulnerability. In particular, high dependency on Japan and China for critical materials like rare earths and high-purity hydrogen fluoride creates a structure vulnerable to supply chain shocks. The LSE study specifically warns that due to the US-China conflict, Korean companies are increasingly likely to have to choose between the US and China regarding technology transfer and facility investment. This dilemma presents both 'opportunities and challenges,' making strategic decisions by the government and businesses even more crucial. The researchers assess South Korea's supply chain resilience index as relatively lower than Japan or Taiwan, attributing this to high dependency on a few countries and a lack of supply source diversification. In Korea's case, semiconductors are one of the most critical industries in the global supply chain reorganization. According to The Economist's analysis, the geopolitical importance of the semiconductor industry has rapidly emerged since the pandemic, leading countries to strengthen their domestic semiconductor production capabilities. Most of the world's advanced semiconductor production capacity is concentrated in East Asia, with Taiwan's TSMC holding an overwhelming share of the foundry market. South Korea's Samsung Electronics shows strength in memory semiconductors, occupying a significant position in the global memory market alongside SK Hynix. The United States and Europe are actively attracting major companies, including Korean ones, to increase domestic semiconductor production. The US passed the CHIPS and Science Act in 2022, allocating approximately $52 billion in subsidies to the semiconductor industry, while the European Union announced an investment of 43 billion euros through the European Chips Act. While these can be seen as opportunities for investment and technological cooperation for Korean companies, they are also challenges accompanied by significant cost increases. Indeed, Samsung Electronics announced the construction of a $17 billion foundry plant in Texas, USA, and SK Hynix is also expanding its investments in the US. Initiatives like the US-led 'Chip 4' semiconductor alliance once again put Korea's position to the test. Chip 4 is a semiconductor consultative body involv
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