• Korean small business review
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• v.42 no.1
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• pp.43-56
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• 2020

The technology conflict between the U.S. and China is deepening recently. The U.S.-China battle began as a national security issue but is comprehending as a U.S.'s check for China's rapid technological advancement. China is rapidly growing in several indexes including R&D expenditure, patent application, and publications, and is challenging the U.S. in 5G and Artificial Intelligence. In 2018, Huawei became the largest 5G network/equipment provider and second largest smart phone manufacturer in the world. Now, Huawei is outperforming at AI chipset manufacturing, Bigdata analysis and cloud, positioning to become a critical player in the 4th industrial revolution. The purpose of this research is to analyze the effect of recent Huawei issues to Korean SMEs focusing on the relation between Huawei and Korean companies; the cooperation status from the Global Value Chain (GVC) perpsective, and Korean government's policies related to Huawei's information security issues will be the three main frames for the analysis. Then, this research proposes policy implications such as increasing Korea's competitiveness in manufacturing and information security.