800 Trillion Won Semiconductor Investment Spurs Capital Influx to Honam... Financial Sector Expands SME Discovery and Investment Hubs

Capturing Demand from Competitive
Material, Component, and Equipment Firms
Relocating with Samsung and SK hynix

Beyond Bank Loans: Linking with Securities and Affiliates

Equity Investment Support Also Considered

Preparing for Increased Regional Financial Demand

With Samsung Electronics and SK hynix set to invest 800 trillion won in semiconductor plants, the financial sector is moving to expand its corporate banking hubs in the Honam region. The reasoning is that as the semiconductor cluster is established in earnest, demand for financing from small and medium-sized enterprises (SMEs) and mid-sized companies either relocating to or expanding in Honam is likely to grow. Financial institutions, which have long been urged to boost local financial support, are now considering evolving their regionally focused, loan-centric centers into more comprehensive hubs by combining them with financial holding company affiliates, enabling services such as equity investment.

Yonhap News

According to the financial sector on July 9, major financial holding companies have recently been considering expanding the functions of their regional support organizations or establishing new related entities within Honam. This follows the government’s announcement to construct four semiconductor fabs by Samsung Electronics and SK hynix at the Gwangju military airport site, which is expected to generate increased financial demand from partner businesses in materials, components, and equipment as they relocate or expand.

An executive vice president at a major commercial bank stated, “Despite calls to expand regional financial support, we have struggled to identify enough high-quality companies to support. If the Honam semiconductor cluster gains momentum, a large number of competitive firms may relocate, so we need to be prepared to actively discover and support them.”

Woori Bank plans to rename the ‘Honam BIZ Prime Center’ to the ‘Jeonnam Gwangju Jeju BIZ Prime Center’ and expand its corporate banking channels in the Honam region. The bank is also considering establishing additional BIZ Prime Centers in Honam. The BIZ Prime Center is an organization dedicated to identifying SMEs and mid-sized companies in response to local business demand. It provides one-stop, comprehensive financial services, including facility and working capital loans, management consulting, asset management, and supply chain finance.

Industrial Bank of Korea is also reportedly considering ways to strengthen its corporate banking functions in Honam by leveraging existing regional organizations. The regional headquarters of Industrial Bank of Korea supports the operations and performance management of its local branches. Internally, the bank is reviewing options to bolster the support functions of its regional headquarters to prepare for increased capital demand.

Within the financial sector, there are also discussions about expanding the role of regional organizations beyond loan operations to broader corporate banking functions. If a comprehensive group-level hub is established—incorporating not only banks but also securities companies, capital firms, and venture capital (VC) arms—companies discovered in the region could be immediately linked to loans, bond issuance, acquisition finance, and equity investment through affiliates. Should investment-capable affiliates such as securities firms be located on-site, some investment work could be conducted directly at the local level.

Another executive vice president at a major commercial bank remarked, “The 800 trillion won investment in Honam semiconductors is a scale that banks cannot support with loans alone. Not only syndicated loans among banks but also organizations that can handle both loans and investment will be needed.”

Since Woori Bank’s BIZ Prime Center is an internal bank organization, it currently only serves to relay local demand for equity investment to the headquarters’ investment banking division. If regional centers are expanded into comprehensive branches in connection with affiliates such as securities firms at the holding company level, a variety of funding options could be offered locally. This would also shorten the time required for on-site investment review and decision-making.

Shinhan Bank is also reviewing plans to connect the Jeonnam Gwangju SOL Cluster, which opened in Honam on July 1, with policy financial institutions for guarantees and insurance, as well as with investment, capital, and capital markets divisions within the group. The SOL Cluster is an organization focused on supporting strategic industries—such as AI, semiconductors, future vehicles, and energy—with equipment investment, working capital, and supply chain finance.

However, some within the banking sector have voiced concerns that expanding centers before the semiconductor plant construction and partner relocations are finalized is premature. They argue that current regional headquarters, local branches, and headquarters’ investment banking departments are already sufficient to support businesses.

A source from the financial sector commented, “It’s true that something needs to be done, but the current support centers are already sufficient for these tasks. This movement seems largely intended to show political stakeholders that action is being taken.”

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