Why has Samsung kept operating its semiconductor facility while Seoul enforces US technology export controls in Xian? Why has LG Energy Solution maintained Chinese battery production despite IRA restrictions targeting Chinese materials? This contradiction reveals South Korea’s sophisticated strategic positioning as a regional power/middle power in high-tech sectors: strict compliance with US restrictions on frontier technologies while preserving bounded cooperation in established manufacturing and supply chains. This chapter examines how South Korea’s regional power/middle power status creates powerful cooperation imperatives that transcend system-level competitive pressures. Through examination of semiconductor and EV battery industries (2018–2025), the study reveals how Korean firms balance alliance obligations with business survival through technological segmentation and supply chain management. The analysis demonstrates South Korea’s approach to middle power diplomacy under great power competition.