"Southwest Region Is Optimal Over Power- and Water-Constrained Central Area"... Blue House Directly Refutes Honam Semiconductor Controversy

Woochang Kim: "Southwest Region's Energy Self-Sufficiency at 170%,
An Inevitable Choice in the Race for Speed"


"Not Forcing Companies... President to Personally Oversee, New Task Force to Launch Soon"

The Lee Jae-myung administration has strongly refuted the controversy surrounding its plan to establish a semiconductor production base in the southwest region, a key pillar of the "Three Major Mega Projects for Korea’s Great Leap Forward," stating that it is "an inevitable choice based on a comprehensive assessment of electricity, water, land, and speed, not a political allocation." The government explained that the Seoul metropolitan area and central region have already reached saturation in terms of power grids, water supply, and residential conditions, leaving no choice but to turn to the southwest, which has abundant energy resources and the potential to develop large-scale industrial sites.

President Lee Jae-myung is taking a commemorative photo with participants after the MOU signing ceremony between the government and companies at the Southwest Advanced Industry Development Vision National Report held at the Kim Dae-jung Convention Center in Gwangju on June 30, 2026. Photo by Yonhap News

Kim Woo-chang, Blue House Secretary for National AI Policy, appeared on KBS 1 Radio’s "Jeonggyeok Sisa" on July 3 and said, "In the AI ecosystem, Korea holds the essential resources at the forefront of the semiconductor pipeline," adding, "The essence of this project is to turn this opportunity into an investment for the future." He went on to explain, "Semiconductors, physical AI, and AI data centers correspond to the upstream of the AI ecosystem, the most rapidly growing application fields, and the factories of knowledge, respectively." He declared, "This is an announcement that we will excel at these better than anyone else in the world."

Addressing the controversy over the southwest site selection, Secretary Kim said, "It would be more unusual not to go to the provinces." He explained, "Semiconductors and data centers require a lot of electricity, water, and land. There is simply no longer a place for such things in the metropolitan area. There is nowhere left for people to live, so how could we proceed there?" Citing the example of the Yongin Semiconductor Cluster, which took about six years to break ground, he emphasized that further expansion in the central region would inevitably face repeated bottlenecks in areas such as power transmission networks, local consent, and securing water resources.

Secretary Kim also stated, "It’s now a race against time," adding, "If Samsung Electronics and SK hynix are to build additional factories, the government must move swiftly." He further explained, "In the central region, it is difficult to go through the process of obtaining approval for power transmission lines in places where there are no longer any areas for people to live. In contrast, Gwangju and Jeonnam have historically been less developed, so there are relatively fewer sources of conflict."

On the issue of electricity, he cited the southwest’s energy self-sufficiency rate as a key reason. Secretary Kim said, "The southwest has an energy self-sufficiency rate of 170%, which means there is already a surplus. In a way, it is inevitable to build data centers and factories where power is generated." He added, "While Korea’s power grid is interconnected, the capacity of the power transmission network from power sources to consumers is what matters. Therefore, going to regions with higher capacity is also inevitable."

He also rebutted claims by opposition parties and some experts that the plan clashes with the government’s carbon neutrality and nuclear phase-out policies. Secretary Kim stated, "Carbon neutrality is not the same as a nuclear phase-out," adding, "The government has announced plans for the Uljin nuclear power plant and the Gijang small modular reactor (SMR) as well." He noted, "Korea’s share of renewable energy is around 9%, which is low compared to the OECD average of about 30%. The southwest is a region where renewable energy generation can be further increased, and not doing so would make exports difficult in the current global trade environment."

Secretary Kim also actively rebutted the so-called "arm-twisting" controversy regarding corporate investment announcements. He shared the mood during the president’s tea time with business leaders on June 29 at the Blue House, saying, "The president joked that if he met with Chairmen Chey Tae-won and Lee Jae-yong, he would want to bow deeply in gratitude. In fact, the 90-degree bow was not scripted." He explained, "The expansion of semiconductor companies during the AI transition era was inevitable, and from the government’s perspective, it was crucial to ensure these factories were established in Korea, not in Japan or the United States."

Regarding interpretations that the use of reserved language such as "if conditions are met" in company disclosures indicates a difference in stance between the government and corporations, he said, "From the business perspective, such language is commonly used because companies have received many such promises in the past. It is a business reality." He continued, "The government is committed to moving quickly and doing what is necessary, and we continue to communicate this." He also hinted at the possibility of additional follow-up announcements, stating, "There will continue to be developments going forward."

A fast-track approach to permits and approvals was also announced. Secretary Kim stated, "At the morning meeting on June 29, the president said, 'Even if it takes staying up all night, get the permits done. I will take direct responsibility.'" He continued, "If it took six years to break ground in Yongin, the determination of the highest authority is to bring that down to zero." He added, "The civil service will follow suit."

A separate implementation system within the Blue House will soon be established. Secretary Kim said, "I understand that a task force (TF) reporting directly to the president will be established as a government organization within the Blue House. The AI Future Planning Office will not be solely responsible for everything." This implies that, while existing offices will oversee related secretariats, the execution of the three major mega projects and management of permits and approvals will be expedited through a dedicated direct reporting system.

After presiding over the National Report on the Three Major Mega Projects at the Blue House on June 29, President Lee will continue his schedule with the National Report on Advanced Industry Investment in the Yeongnam region in Jinju, Gyeongnam, following similar events in Gwangju and the Chungcheong region. The government and companies plan to create hubs for advanced industries such as semiconductors, AI data centers, and physical AI in non-metropolitan areas. As the president personally tours regional report meetings and pledges to address corporate investment, permits, and improvements to residential conditions, future points of contention are expected to shift from the scale of announcements to the actual construction speed, local acceptance, and capacity to expand the power grid.

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