"Semiconductor investment talks in Honam and Chungcheong nearing conclusion... Yongin plan unchanged"

Kim Yong-beom said on the 24th that talks are nearing completion over reports circulating in political and business circles that Samsung Electronics and SK hynix are reviewing semiconductor investments worth hundreds of trillions of won in the Honam Region, including Gwangju and Jeollanam-do, as well as in the Chungcheong region. "If it is finalized, we plan to arrange a session where the companies and ministries can gather together and explain it to the public at once," he said. A detailed investment plan is expected to be announced as early as early next week.
■Hundreds of trillions of won in investment under review for Honam and Chungcheong
Speaking at the Kwanhun Club forum at the Korea Press Center in Jung-gu, Seoul, Kim said that, in reference to Samsung Electronics and SK hynix, "it is true that serious discussions are under way among the two companies, ministries and the government over where to locate new semiconductor investments."
He added, "There is a broader question of how to support the artificial intelligence revolution and whether we need to seek a second cluster." He continued, "The companies have their own concerns, and the government is also working through major issues such as site selection, power, water and labor as we try to draw up a plan together." Samsung Electronics and SK hynix are reportedly reviewing plans to expand semiconductor cluster investments, focusing on the Honam Region, including Gwangju and Jeollanam-do, as well as the Chungcheong region.
Kim, however, drew a line under speculation that the existing Yongin Semiconductor Cluster General Industrial Complex plan would be moved to a provincial area. "This is absolutely not about canceling what was planned for Yongin and moving it to the provinces," he said. "We are not relocating what is in the capital area. We will build as much as can be built in the capital area and then create a new cluster."
Kim said the reason for discussing a second semiconductor cluster location is that semiconductor demand is rising faster than expected. "SK hynix's fourth fab is scheduled for completion in 2044. But that has been brought forward to 2034," he said. "What was supposed to be built by 2044 now needs to be built by 2034."
He said the same applies to Samsung Electronics. "Samsung also has plans through 2048," he noted. "It will probably need to be brought forward to 2034 or 2035." He added, "The clusters in the capital area must be completed by 2034 or 2035. After that, we need to prepare for the next stage, but there is no land left in the capital area, and neither power nor water is feasible there." He explained that building one semiconductor front-end fab takes seven to eight years, so if construction in Yongin is completed first and only then begins at the next site, it would be too late. That is why the government needs to start developing the new site now.
Kim also said, "During the Middle East war this year, we drew up a supplementary budget of 25 trillion won, but an even larger amount of excess tax revenue is expected to come in before the end of the year." He said the current semiconductor supercycle is likely to have a significant ripple effect.
Asked whether the government plans to build additional nuclear power plants to meet electricity demand, Kim said, "I believe there will be serious discussion in the 12th Basic Plan for Electricity Supply and Demand," suggesting the possibility of additional nuclear construction.
■Special act to preserve Yongin plan and boost Honam
Meanwhile, the government is reportedly set to include preferential provisions for non-capital regions in the enforcement decree of the Special Act on Strengthening and Supporting the Semiconductor Industry's Competitiveness. The originally considered "capital area exclusion" clause has been dropped, allowing the Yongin Semiconductor Cluster General Industrial Complex to proceed as planned. However, the preferential treatment for non-capital regions is expected to give more momentum to the Honam semiconductor cluster project promoted by the government and the ruling party. People Power Party lawmaker Koh Dong-jin, a former Samsung Electronics president, said he received confirmation from the Ministry of Trade, Industry and Energy that Article 15 of the enforcement decree of the Semiconductor Special Act will include "preferential treatment for non-capital regions" instead of "exclusion of the capital area."
cjk@fnnews.com Choi Jong-geun Reporter