Samsung and SK Accelerate 'Honam Semiconductor Investment'... Industry Warns, "It Took Ten Years in Pyeongtaek"

It Usually Takes 6 to 10 Years to Build a Semiconductor Plant
Infrastructure, Power, and Water Supply Present Major Obstacles
“Yongin Will Eventually Reach Full Capacity,” Some Voice Optimism
“Government Must Provide Sufficient Infrastructu

Samsung Electronics and SK hynix are pushing forward with plans to build semiconductor clusters in the Honam and Chungcheong regions, with investments exceeding 200 trillion won. However, concerns outweigh expectations within the industry. This is because there are numerous hurdles to overcome, from securing electricity and water supply to obtaining land permits, resolving civil complaints, and preventing talent attrition—just to establish a single advanced semiconductor production line. Considering the precedent where it took 6 to 8 years from groundbreaking to operation for cluster construction in the Seoul metropolitan area, experts point out that it will inevitably take significant time for investments in the Honam and Chungcheong regions to lead to actual production.

SK hynix Semiconductor Cluster Phase 1 Fab Construction Site, Cheoin-gu, Yongin, Gyeonggi Province. Photo by Jinhyung Kang

According to the business community on June 24, Samsung Electronics and SK hynix plan to announce large-scale regional investment plans centered around Gwangju, Jangseong in South Jeolla Province, and Onyang in South Chungcheong Province at the end of this month, during a joint public-private meeting on 'National Spatial Transformation' chaired by President Lee Jaemyung. The plans reportedly include not only packaging plants but also establishing new front-end fabs (production lines), and even the potential relocation of part of the Samsung Electronics Yongin Cluster to the Honam region. President Lee is scheduled to meet with Samsung Electronics Chairman Lee Jae-yong at the Blue House on June 25, and it is known that he already met with SK Group Chairman Chey Tae-won on June 19.

This plan aims to expand the current semiconductor production base, which is concentrated in the metropolitan area, to the Honam and Chungcheong regions. Gwangju, Jangseong in South Jeolla Province, and Onyang in South Chungcheong Province are being discussed as investment locations. The investment scale is at least 200 trillion won, which is larger than initially reported. As the investment amount has been significantly increased, the construction of not only packaging plants handling the semiconductor back-end process but also front-end fabs responsible for the core manufacturing process is being strongly considered. Additionally, there is even talk of relocating some of the fabs that Samsung Electronics planned to build at the Yongin Cluster to the Honam region.

Industry: "Electricity, Water, and Talent All Present Challenges"

However, the semiconductor industry points out that cluster construction will not be easy in reality. In particular, operating advanced semiconductor production lines requires stable 24-hour electricity supply and securing large volumes of water. Since tens of trillions of won are invested in each plant, a series of procedures must follow after the investment decision, including industrial complex approval, land compensation, environmental impact assessments, construction of power transmission and water pipelines, and securing community acceptance. The further a region is from existing clusters in the metropolitan or Chungcheong areas, the more challenging it becomes to secure talent and generate synergy with partner companies. Strong incentives, such as improving living conditions, are also necessary to encourage specialized professionals—currently concentrated in the metropolitan area—to move to regional locations.

In fact, these same issues caused significant delays in the construction of the Samsung Electronics Pyeongtaek Campus and the Yongin Cluster. For the Pyeongtaek campus, it took over six years from the land agreement in December 2010 to the first line becoming operational in 2017. The semiconductor cluster SK hynix is constructing in Yongin has faced similar timelines: it took six years from selecting Yongin as an investment site in February 2019 to groundbreaking last year, and it will take about eight years in total until scheduled completion. Furthermore, the issue of Anseong residents opposing wastewater discharge remains unresolved.

An industry insider said, "It took nearly 10 years just to install a single transmission tower at the Pyeongtaek campus," adding, "Procedural issues such as site preparation, land compensation, and civil complaints are not easy matters." The source continued, "The talent issue is also challenging. Employees are already reluctant to move to Yongin or Pyeongtaek, so resistance will be even greater if they are asked to move to the Honam region."

Kim Yangpaeng, a senior researcher at the Korea Institute for Industrial Economics and Trade, also remarked, "SK hynix has only just started construction on the Yongin cluster, so if part of it is relocated to the Honam region, it could take another four to five years," emphasizing, "If the planned factories or production output are not achieved, competitiveness will inevitably fall behind."

On the other hand, some argue that cluster expansion is necessary from a long-term perspective. They point out that if demand for semiconductors driven by artificial intelligence (AI) continues, even the current production capacity will eventually become insufficient. Another industry source commented, "The Yongin cluster will eventually reach full capacity, so a 'next' location will be needed."

Lee Jonghwan, professor at the Department of System Semiconductor Engineering at Sangmyung University, stated, "A key advantage of the Honam region is the ability to use renewable energy for power. With RE100 (100% renewable energy) regulations expected to become stricter, using renewable energy in production lines is a clear benefit, and I understand that industrial water will not be a major issue either." Regarding delays in semiconductor production, he added, "It takes the same amount of time to build a new production line wherever it is. For immediate demand, some expansion can be made at existing sites in the metropolitan area, the United States, or China."

This content was produced with the assistance of AI translation services.