Why Naju? The Hidden Puzzle for the Success of Honam Semiconductors: The 'Energy' Supporting City

KEPCO, Korea Power Exchange, and KENTECH Clustered Together
Birth of Korea’s Largest Energy Cluster
Dual-Track Structure: Gwangju as Production Base, Naju as Support Base
Building an Ultra-Scale Industrial Belt as the Core Task

Editor's NoteWith the designation of about 8.26 million square meters (approximately 2.5 million pyeong) of the Gwangju military airport area as a candidate site for the Honam region's advanced national semiconductor industrial complex, the concrete blueprint for the Honam semiconductor industry is starting to take shape. Companies such as Samsung Electronics and SK hynix have already visited the site to assess the size and possible placement of fabs, as well as the conditions for electricity and water supply and transportation networks. As a result, the project is moving from the planning to the execution stage. However, a globally competitive semiconductor cluster cannot be realized by simply building large-scale factories. To operate semiconductor fabs 24/7 without interruption, a robust power grid, ultrapure water supply facilities, research and development institutes, materials, parts, and equipment companies, skilled technical workforce, and favorable conditions for logistics and settlement all need to be in place simultaneously. For these reasons, Naju City, located adjacent to the Gwangju military airport site, is being highlighted as the core supporting city for the Honam semiconductor cluster. If Gwangju is positioned as the stronghold for semiconductor production processes, Naju is seen as the rear industrial base, responsible for power supply and research and development, power equipment, and talent development.

For Semiconductor Cluster Competitiveness, Infrastructure Comes Before Factories

Semiconductor factories are a prime example of facilities that consume massive amounts of electricity. Thousands of process equipment and various air conditioning, cooling, and purification facilities run continuously, where even a momentary voltage fluctuation or supply interruption can lead directly to production losses. Especially with the growth of the AI semiconductor, high-bandwidth memory, and advanced packaging industries, power demand has surged not only for fabs but also for data centers and research facilities.

In the future, companies are likely to choose investment locations not solely based on site size or tax benefits, but increasingly based on the ability to ensure reliable power supply and the speed at which transmission networks can be established. This is why a working-level consultative body for power supply—including the central government, Jeonnam-Gwangju Special Metropolitan City, Korea Electric Power Corporation (KEPCO), Samsung Electronics, and SK hynix—has been formed.

Night view of Bitgaram Innovation City in Naju, equipped with the best energy industry base and research infrastructure in Korea. Provided by Naju City

Currently, there are discussions underway to connect the 345kV Sinjangseong-Singwangju transmission lines to the national semiconductor industrial complex and to build the first-phase power supply network by the end of 2029.

This is where Naju’s role comes to the forefront.

Bitgaram Innovation City is home to key institutions in Korea’s power industry, including KEPCO headquarters, Korea Power Exchange, KEPCO KDN, and KEPCO KPS. Organizations responsible for nationwide transmission and distribution of electricity, management of national power supply and demand, operation of power information systems, and maintenance of power generation and transmission facilities are all clustered within the same living sphere.

From the perspective of the semiconductor cluster, Naju is not just a city that generates or supplies power. It is Korea’s largest energy industry hub, where power grid design and system operation, information and communications, maintenance, and power technology research and business support functions are linked. KEPCO is also working to attract and nurture energy companies by branding Gwangju-Naju Innovation City and the surrounding industrial complexes as an “energy valley.”

Of course, having numerous energy-related institutions in one place does not automatically ensure power supply. It is important to distinguish between the fact that Naju houses major energy public institutions and the actual availability of power required for semiconductor fabs.

Even with KEPCO headquarters nearby, without timely construction of large-scale substations, transmission lines, and power stabilization facilities, semiconductor factories cannot operate. Building the power grid is a major infrastructure project that, after site selection, still requires permits, negotiations with residents, securing funding, and construction of facilities.

Especially if the first fab aims for operation around 2030, building the power grid cannot lag behind the development of the industrial complex. There are concerns that following existing administrative procedures in sequence may not keep pace with the required speed of corporate investment.

Thus, to truly connect Naju’s symbolism as an “energy capital” to semiconductor competitiveness, the focus must shift away from merely highlighting the presence of KEPCO and the Korea Power Exchange. Instead, it is essential to integrate the project into the national-level power supply plan by fast-tracking the expansion of transmission and substation networks linking Naju and Gwangju, and to manage industrial complex development, fab construction, and power supply schedules as a single, unified timeline.

The power grid for the semiconductor cluster must be managed as a national core infrastructure, not just as part of the general industrial zone groundwork.

Ultrapure Water Supply: Harder than Securing Raw Water, Requiring a Separate Industry

In the semiconductor industry, water is as important as electricity. In semiconductor processes, highly purified ultrapure water—not ordinary industrial water—is used to remove microscopic contaminants from wafer surfaces. The critical issue is that securing a source of water does not automatically equate to an ultrapure water supply.

Even with sources secured from dams or rivers, it is necessary to separately establish intake facilities, pipelines, purification plants, ultrapure water production systems, as well as wastewater treatment and recycling systems. As manufacturing processes become more advanced, the technology needed to remove ions, organics, and microparticles from water must also become more sophisticated.

Naju enjoys a geographical advantage due to its proximity to the Yeongsan River system and the ability to utilize surrounding water resources. However, to actually supply industrial water to the semiconductor sector, it is essential to closely verify the intake capacity, demand from agriculture and residential use, supply stability during droughts, and the construction cost of pipelines to the Gwangju military airport site. In particular, to avoid production shutdowns during prolonged droughts, it is necessary to establish multiple supply chains rather than relying on a single water source. At the same time, designing a cyclical water management system to enhance process wastewater reuse should be incorporated from the initial stage.

Naju City’s efforts to review its industrial water and ultrapure water supply infrastructure with a focus on the Noan district are highly significant in this regard.

Samsung Electronics and SK hynix have decided to invest 800 trillion won to establish the Honam Semiconductor Cluster on the site of the Gwangju military airport. Provided by Naju City

Electrical Equipment Industry: An Opportunity to Expand to Semiconductor Materials, Parts, and Equipment

Among the industrial fields in which Naju can realistically secure a foothold within the semiconductor cluster, power equipment stands out. Semiconductor fabs require extensive power facilities, including transformers, circuit breakers, switchgear, uninterruptible power supply systems, emergency generators, and power quality management systems. As production lines increase, demand for equipment inspection, maintenance, and replacement continues to grow.

Centered on KEPCO and the Energy Valley, Naju has acquired both power equipment companies and relevant support organizations. The plan to nurture the Noan General Industrial Complex as a hub specialized in power equipment can also be directly linked to the Honam semiconductor cluster.

The key lies in advancing the existing power equipment industry to meet the demands of semiconductor fabs.

Unlike conventional power facilities, semiconductor factories must not only prevent blackouts but also manage minute voltage fluctuations, harmonics, and instant voltage sags. Technology for equipment reliability, real-time diagnostics, and predictive maintenance is also necessary.

Therefore, for Naju’s electrical equipment companies to enter the semiconductor sector’s supply chain, efforts to obtain product certification, conduct demonstration tests, improve quality, and support joint research and development must follow. It is more important to establish a procurement and demonstration system connecting semiconductor companies and local firms, rather than simply developing an industrial complex.

Korea University of Energy Science and Technology Lays Groundwork for Talent Development

In research and development and talent cultivation, Korea University of Energy Science and Technology (KENTECH) is Naju’s chief asset. KENTECH focuses its research on energy AI, next-generation power grids, new energy materials, power electronics, and power semiconductors. In the field of power semiconductors, research is being carried out to connect materials, devices, circuits, and systems.

If KENTECH, Dongshin University, and Naju Power Engineering Training Institute each take charge of research personnel and field engineers, Naju can become a distinguished education city that not only provides semiconductor process personnel but also develops “semiconductor infrastructure specialists.”

Korea University of Energy Science and Technology, located in Bitgaram Innovation City, Naju, is the world's only national research-focused university specializing in energy. It leads research in future core technologies such as power semiconductors, AI, new energy materials, and next-generation power grids. Provided by Naju City

The Biggest Variables Are the Relocation of the Military Airport and Time

The greatest challenge facing the Honam semiconductor cluster is ultimately the relocation of the Gwangju military airport. Designating the area as a national industrial complex candidate site is only the starting point. To commence construction, the relocation site for the military airport must be confirmed and the existing site delivered in a timely manner. Designation of the project implementer, feasibility studies, development of industrial complex plans and approval, lifting of development restriction zones, and construction of infrastructure must all follow.

If the goal set by the government and the special city is to operate the first production facility around 2030, there are limits to relying on the existing step-by-step administrative procedures. An integrated roadmap for relocating the military airport, developing the industrial complex, providing power and water supply, and constructing fabs simultaneously is required.

Naju must also move away from a passive approach of reviewing support measures only after the Gwangju semiconductor industrial complex is finalized. The city must reverse-engineer its plans for the power grid, ultrapure water, research centers, talent cultivation, and business attraction to align with the semiconductor fab construction schedule. If basic industrial infrastructure is only developed after the first fab starts operating, there is a strong likelihood that core partner companies and research institutes will be drawn to other locations. The next three to four years, when national industrial complex infrastructure is being built, is the decisive period for Naju to establish itself as the key support city for semiconductors.

Byungtae Yoon, Mayor of Naju, stated, "The Honam semiconductor cluster is a national future strategy that must be completed by both Gwangju and Naju together. If Gwangju becomes the advanced semiconductor production base, Naju will serve as the core supporting city of the cluster, backed by Korea’s top energy infrastructure, R&D capabilities, industrial water supply, and specialized talent training systems."

He added, "By utilizing energy public institutions led by KEPCO, Korea University of Energy Science and Technology, the national energy industrial complex, and next-generation power grid-related industrial infrastructure, we will actively attract semiconductor materials, parts, and equipment companies as well as R&D functions. Our goal is to realize a global future industry hub where energy and semiconductors converge."

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