[Insight & Opinion] A Mega Project Started by Politics Must Become a National Initiative Led by Business

Samsung and SK Group to Invest Nearly 5,000 Trillion Won
Southwest to Host Semiconductor Cluster
Chungcheong to Get Semiconductor Packaging Plant
Southeast to Establish MPE Factories and AI Data Center

Blue House Assigns Dedicated

The "Korea Grand Leap Forward: 3 Major Megaprojects" announced by the Lee Jae-myung administration on June 29 can truly be described as the largest investment in Korean history. The total investment pledged by Samsung and SK Group alone amounts to 4,755 trillion won. This is more than twice last year’s real GDP of 2,326 trillion won—a truly staggering amount, even excluding the infrastructure costs the government will bear. For reference, the "Four Major Rivers Restoration Project" during the Lee Myung-bak administration (2008–2011) cost 22 trillion won. With the government now pushing ahead with a project more than 216 times larger in just 18 years, the record for the largest investment in Korean history has been rewritten.

President Lee Jae-myung, Samsung Electronics Chairman Lee Jae-yong, and SK Group Chairman Chey Tae-won are taking a commemorative photo after presenting corporate investment plans at the 3 Major Megaproject National Report Meeting held at the Blue House on the 29th of last month. [Photo by Blue House Press Photographers] Yonhap News Agency

President Lee Jae-myung’s ambitious vision was on full display as he exchanged deep 90-degree bows with the heads of major corporations. He declared, "I will make this year the beginning of a Korea that is truly irreplaceable on the global stage." He announced plans to establish a semiconductor cluster in the Southwest (Honam), a semiconductor packaging plant in the Chungcheong region, and factories for components, materials, and equipment as well as an artificial intelligence (AI) data center in the Southeast (Daegu and North Gyeongsang Province). To launch these megaprojects that will begin a new chapter in Korea’s history, a dedicated office will be established at the Blue House, and President Lee himself will directly oversee these efforts.

The most attention is focused on the Southwest semiconductor cluster, which will be located in Gwangju. At a national report meeting held in Gwangju on June 30, President Lee clearly defined the Southwest cluster as "a historic and national compensation for the Honam region." The Blue House also acknowledged that it directly "guided and attracted" corporate investment. Now that it is public knowledge that the project was conceived by the Blue House, heated political debate is inevitable. Even if the project’s origins are political, the government and ruling party must ensure that these megaprojects become genuine national priorities.

Amid all this, the perspective of the corporations is of utmost importance. The final decision on when, in what form, and how the Southwest semiconductor cluster will be built is entirely up to the companies. Political considerations can only be secondary. What is required is a precise analysis of the global semiconductor cycle, accurate future forecasts, and a strong sense of responsibility for the country’s future and the well-being of its people.

View of the construction site at Yongin Semiconductor Cluster General Industrial Complex in Yongin, Gyeonggi Province. Photo by Yonhap News Agency

Building a semiconductor cluster with an investment of 895 trillion won is by no means an easy task. While the government has articulated a vision to make the Southwest, along with Giheung and Yongin in the metropolitan area, a second hub for Korea’s semiconductor production, it must honestly acknowledge that there is a severe shortage of essential resources such as electricity, water, and skilled labor. Irresponsible distortion of facts and one-sided arguments spread via social networking services (SNS) can only fuel public confusion and make the situation more difficult. The era of authoritarian development, as seen in the days of Pohang and Gwangyang, must never be repeated. We must not forget that we now live in a democratized, information-driven era.

Currently, 23.3 GW of solar and wind power installations are in place in South Jeolla Province. However, the average annual utilization rate of solar and wind power does not exceed 20%. Although it appears that the region is overflowing with renewable energy, in reality, it only amounts to about 70% of the 6.3 GW required for the semiconductor cluster.

Making matters worse, of the 37.1 GW of solar and wind power generation facilities installed nationwide, 8.9 GW—representing 23%—are still waiting to be connected to the grid. This highlights that building transmission networks is just as important as installing generation facilities. Not only are large-scale "energy highways" needed, but also a web of "energy national and local roads" to collect and transmit electricity from low-density renewable energy installations. This will require enormous costs and the arduous task of persuading local residents.

Due to the nature of semiconductor manufacturing, the cluster must have a power infrastructure capable of supplying the highest quality electricity continuously, 24 hours a day, 365 days a year, with absolute stability. Semiconductor plants cannot be operated solely on highly intermittent and variable solar and wind power. Energy storage systems (ESS) based on lithium-ion batteries are also unreliable: installation costs are prohibitive, fire risks persist, and the batteries themselves last for a maximum of 10 years. Ultimately, to ensure stable electricity supply for large-scale semiconductor clusters, nuclear power plants must be built.

An accurate understanding of RE100 (100% renewable energy), which the government and ruling party emphasize, is also necessary. RE100 is merely a "marketing strategy" promoted by a private organization called the Climate Group based in the UK. It is completely different from actual intergovernmental "treaties" or "agreements" that have binding force on semiconductor exports. There is no reason to be swayed by the provocative, promotional slogans of private groups. Moreover, it has recently become possible to obtain RE100 certification even when using electricity from nuclear power, which is a "carbon-free energy source."

Supplying 650,000 tons of water per day is also no easy feat. Minister of Climate, Energy, and Environment Kim Sung-hwan’s optimistic assertion that more than 1 million tons of industrial water per day can be secured using the seven dams along the Yeongsan and Seomjin Rivers, which can store up to 1.5 billion tons of water, lacks persuasive power. The Honam region has historically been passive in water resource development, and it is also true that calls for the "renaturalization" of the Yeongsan and Geum Rivers have been loudest in this region. Proactive measures are needed to address conflicts with agricultural water use.

The Blue House must clarify the Ministry of Climate’s confusing stance. Despite the president’s public statement that meaningless partisan debate over nuclear power is inappropriate, the ministry remains unmoved. It still appears to lack the will to overcome the "anti-nuclear, pro-renewable energy" framework. The speculation, suddenly raised by Minister Kim last December, about relocating the Yongin cluster to Saemangeum must also be definitively resolved.

Unrealistic ambitions to complete a memory fabrication plant during the president’s term should be abandoned. While basic factory buildings to block wind and rain can be erected quickly, establishing the infrastructure and facilities needed for advanced semiconductor production is an entirely different matter. The Yongin cluster, which began in 2019, did not break ground until February last year. The environmental impact assessment alone took two years, and conflicts with local residents over land compensation and electricity and water supply also had to be resolved. No matter how urgent the timetable, the semiconductor cluster must not be built in haste.

Deokhwan Lee, Professor Emeritus at Sogang University, Science Communication

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