S. Korea plans to build chipmaking mega cluster, with Samsung investing 300T won

Posted on : 2023-03-16 17:29 KST Modified on : 2023-03-16 17:29 KST
New national industrial complexes will also be built in 14 locations outside the capital area
Won Hee-ryong, the minister of land, infrastructure and transport, announces a strategy for nurturing Korea’s cutting-edge industries during a briefing at the government complex in Seoul on March 15. (Yonhap)
Won Hee-ryong, the minister of land, infrastructure and transport, announces a strategy for nurturing Korea’s cutting-edge industries during a briefing at the government complex in Seoul on March 15. (Yonhap)

The South Korean government plans on establishing the world’s largest system semiconductor cluster in the greater Seoul area by attracting 300 trillion won in private investments. New national industrial complexes will also be built in 14 locations outside the capital area to promote high-tech industries such as space, future vehicles, and hydrogen.

On Wednesday, the Ministry of Trade, Industry and Energy and the Ministry of Land, Infrastructure and Transport announced their strategy for promoting national high-tech industries and a plan to create a “national high-tech industry belt” at an economic policy meeting.

However, some are concerned about the strong focus on the metropolitan area and the possible destruction of local ecosystems. In addition, others are pointing out that the current plans are just a rehash of investment plans presented by major corporations last May.

Mega cluster in the satellite cities of Seoul

The core of this plan to promote national high-tech industries is the system semiconductor cluster in which Samsung Electronics is investing.

Samsung Electronics plans to invest 300 trillion won (around 15 trillion won per year) over 20 years by 2042 to build five high-tech semiconductor manufacturing plants and other production facilities in the city of Yongin in Gyeonggi Province.

On the same day, the Ministry of Land, Infrastructure and Transport selected a 7.1 million square meter site in Yongin to build the national industrial complex.

Regarding the plans, President Yoon Suk-yeol said, “The current global competition situation is a matter of life or death, so we have to hurry,” adding that Korea “will develop the world’s largest semiconductor mega cluster.”

According to Samsung Electronics, “If a new cluster is created, we can complete the world’s largest 'semiconductor mega cluster' by linking semiconductor production complexes in Giheung, Hwaseong, Pyeongtaek, and Icheon with nearby parts and equipment companies and fabless firms.”

Samsung Electronics also revealed that the 300 trillion won investment would result in a “direct and indirect” production inducement effect of 700 trillion won and would create jobs for 1.6 million people.

Although a large complex is inevitably needed due to the special characteristics of the semiconductor industry which requires a large amount of manpower, water, and electricity, some point out that the concentration of resources in the metropolitan area will become more intense.

“The local ecosystem has already been devastated and balanced regional development cannot be achieved if we focus only on investing in industrial aspects in the metropolitan area,” said So Soon-chang, professor of public service at Konkuk University.

The government announced that companies will invest 550 trillion won, including Samsung Electronics' investment in the semiconductor cluster, in six high-tech industries.

However, excluding the 300 trillion won Samsung investment, the plan seems like a repeat of large-scale investment plans presented by major corporations last May after the inauguration of the Yoon administration.

Several company officials told the Hankyoreh that they “did not submit any separate materials” this time around due to the current plans being “very similar in scale” to those announced last year.

14 national industrial complexes

Besides the major semiconductor cluster, the government has also decided to designate 14 new national industrial complexes in areas outside of the larger capital region. This is the first national industrial complex project announced by the Yoon Suk-yeol administration and the largest (totaling 40.76 million square meters including the Yongin site) among industrial complexes designated by previous governments.

Areas currently being considered for the complexes include Daejeon (nanotech, semiconductors, aerospace), Cheonan (future mobility, semiconductors), Cheongju (railway), Hongseong (hydrogen, future vehicles, secondary cell batteries), Gwangju (core parts for future vehicles), Goheung (space launch vehicles), Iksan (food tech), Wanju (manufacturing for utilization and storage of hydrogen), Changwon (defense, nuclear energy), Daegu (future vehicles, robots), Andong (biomedicine), Gyeongju (small modular reactors), Uljin (hydrogen used in nuclear power plants), and Gangneung (natural bio-food).

The designation as a national industrial complex comes with benefits such as quick processing of permits, the construction of infrastructure, and tax deductions.

Restrictions currently in place on the development of green belt zones and agricultural land will also be relaxed at the highest levels in order for these complexes to be built. Prior discussions with related organizations and preliminary feasibility studies will also proceed as quickly as possible.

“We will boldly loosen the green belt so that front- and back-end companies can comfortably move in without a lack of land,” said Won Hee-ryong, minister of land, infrastructure and transport.

By Kim Hoe-seung, senior staff writer; Lee Jeong-hun, staff reporter; Kim Mi-na, staff reporter

Please direct questions or comments to [english@hani.co.kr]

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