Australian golf's form player birdied two of her last three holes in a second-round four-under-par 68 at the picturesque Pine Beach Golf Links, southwest of Gwangju.
The first-round co-leader, Davidson moved to 10 under par for the championship as world No.3 Haeran Ryu delighted home fans in bursting from the pack to be the solo front-runner.
Producing some majestic ball striking, Ryu eagled both par-5s on the front nine and collected four more birdies in a flawless eight-under 64.
In backing up an opening round of 67, the 25-year-old remains bogey free through 36 holes and 13 under par as she looks to add another trophy to a splendid 2026 season that has already yielded two major championships.
Fellow South Korean Minsun7 Kim matched Ryu's 64 to surge into a share of second, two shots behind, with American Lauren Coughlin, who fired a second-round 66.
Davidson is three strokes behind in a tie for fourth with Spaniard Julia Lopez Ramirez (67).
With three front-nine birdies, Davidson retained a share of the lead before Ryu kicked clear as the Victorian dropped shots on the 10th and 15th holes.
But Davidson steadied down the stretch to give herself a serious weekend crack at landing her maiden LPGA Tour title.
Fellow Australian Grace Kim rebounded from a first-round 73 to climb to four under and a tie for 32nd following a 67 on Friday.
Robyn Choi (72) is equal 45th at two under, while Minjee Lee (69) and Cassie Porter are joint 67th at one over.
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