As Samsung Electronics and SK Hynix prepare for significant semiconductor investments in the Honam region, industry attention is focused on the specifics of location, timing, and scale. Ahead of a meeting between the president and business leaders scheduled for the end of this month, both companies are finalizing plans for large-scale investments in response to government demands for regional balanced development.
According to sources from relevant ministries and the industry on June 17, Samsung and SK Hynix are conducting final internal reviews regarding semiconductor investments targeting the Honam area. The upcoming Semiconductor Special Act, which will take effect in August, specifies 'regional balanced development' as a requirement for cluster designation, prompting companies to accelerate their efforts to secure policy benefits such as infrastructure cost support and acquisition tax reductions.
The leading candidates for investment locations include Gwangju's Advanced 3 District, Saemangeum in North Jeolla Province, and areas in South Jeolla Province such as Muan and Haenam. The Advanced 3 District in northern Gwangju is noted for its AI-based industrial infrastructure and data centers, facilitating research and development (R&D) connections. It is also praised for its well-connected transportation network, including the Honam Expressway, National Route 13, and Bitgoeul Road, making it an optimal site for semiconductor logistics.
Samsung is particularly considering the Advanced 3 District in Gwangju. The company identified Gwangju as a potential site for domestic production lines during its acquisition of the European Flakt Group last November. By adding semiconductor investments, Samsung aims to maximize the clustering effect and integrate the core industrial ecosystem in the Honam region.
Saemangeum is vying for semiconductor hub status with its large, affordable land and power grid. The area already has a robust water supply system and is simultaneously developing logistics networks, including a new port and airport, enhancing its competitiveness as a global export hub. Haenam and Muan are also considered optimal locations due to their solar power complexes, which meet the RE100 (100% renewable energy) requirements demanded by global tech giants.
The primary focus of the investment will be on advanced packaging lines, which are crucial for the final stages of semiconductor production. The importance of post-processing, which influences the performance of next-generation memory like high-bandwidth memory (HBM), has grown, especially with global post-processing firm Amkor Technology already established in Gwangju. This aligns with the government's plan to create an advanced packaging cluster within the 'Southern Innovation Belt,' promising significant synergy.
The total investment from both companies is expected to exceed 19 trillion won each. Samsung has allocated several trillion won for expanding its advanced packaging facility in Onyang, while SK Hynix has earmarked an initial budget of 19 trillion won for its new P&T7 facility in Cheongju, which broke ground in April. Experts believe that given the scale of existing investments, the infrastructure development in the Honam region will require even larger financial commitments.
However, there are concerns regarding this investment plan. A mega-cluster worth hundreds of trillions of won is already being established in the southern part of the metropolitan area, including Yongin and Pyeongtaek. Critics argue that if additional investments are directed toward the Honam region, it could disrupt the existing semiconductor ecosystem centered in the metropolitan area, making organic collaboration more challenging due to geographical dispersion.
Despite these concerns, this investment is seen as a win-win for both companies and the region. For businesses, it allows them to align with the government's balanced development agenda without disrupting core production lines in the metropolitan area. Additionally, they can benefit from generous tax incentives and affordable land, minimizing investment risks while maximizing returns.
Lee Jong-hwan, a professor at Sangmyung University’s Department of System Semiconductor, emphasized, "While anchor investments from large corporations are important, it is essential for material, parts, and equipment suppliers to also establish a presence. Tailored talent development centered around local universities and comprehensive infrastructure support from the government are crucial for realizing substantial investment benefits."
* This article has been translated by AI.
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