In the transition of the international order from liberal interdependence to “coercive geoeconomics,” the instrumentalization of semiconductor supply chains has challenged the efficacy of traditional middle power strategies such as “balancing.” Focusing on the structural paradox of South Korea, this study seeks to answer the question of why Seoul has been forced to fully align with the United States despite the enormous economic costs. Introducing the innovative concept of “limited technological sovereignty,” this paper argues that having “production capabilities” without control over “exclusive upstream technologies” (such as American equipment and software) deprives middle powers of strategic agency. Using causal process tracing methodology, this study traces the mechanism of pressure transmission from the US 2022 export controls to Korea’s domestic political economy and shows how Seoul has shifted from a balancing strategy to a behavioral model of “coercive compliance.” A situation in which the actor accepts certain economic losses (a 78.1% drop in investment in China) to ward off technological existential risks. The research findings suggest that “limited technological sovereignty” is not an exception, but rather, as a new analytical lens, has the potential to explain the behavior of other “techno-industrial” powers such as the Netherlands and Japan in the new bipolar order.