Despite the implementation of the Semiconductor Special Law, the Yongin semiconductor cluster, set to begin operations next year, faces the risk of being sidelined from government support. The clause prioritizing non-metropolitan areas for cluster designation has emerged as a last-minute variable, raising alarms about the timely operation of the Yongin fab, which is currently undergoing final construction with an investment of hundreds of trillions of won.
The 'Special Law on Strengthening and Supporting the Competitiveness of the Semiconductor Industry' and its enforcement decree will take effect on August 11. This legislation formalizes government support for the costs of building essential infrastructure such as power and water, fast-tracks permits, and provides tax benefits. It is a comprehensive support measure aimed at securing a competitive edge for the domestic ecosystem amid global competition for AI semiconductor leadership.
According to relevant ministries and industry sources on August 10, the first semiconductor cluster designated under the Special Law is increasingly likely to be located in non-metropolitan areas such as Honam and Chungcheong. This follows the government's approval of an enforcement decree on August 4 that states, 'non-metropolitan areas will be prioritized for cluster designation.'
Concerns are growing that both SK Hynix, which is set to begin operations at the Yongin fab in the first half of next year, and Samsung Electronics, which plans to complete site development within the year, may fall behind in the infrastructure support ranking. Under the current legislation, if they are designated as lower priority, they will not receive benefits such as the local government’s automatic approval system (which allows for automatic approval after application) and exemptions from preliminary feasibility studies. They will also miss out on various environmental and safety regulation exemptions.
As Samsung Electronics and SK Hynix pursue large-scale semiconductor investments in key regional hubs, they may eventually benefit from the government's regional balanced development policies. Samsung plans to expand its next-generation fab in Gwangju and enhance its advanced packaging (AVP) hubs in Cheonan and Asan, while SK Hynix has announced plans to invest tens of trillions of won in building a semiconductor belt in non-metropolitan areas such as Cheongju.
The issue at hand is the mismatch in the semiconductor timeline. With a critical focus on the early operation of the Yongin fab in response to the global semiconductor supply shortage, any exclusion from government and local support measures could inevitably disrupt the final connections of essential infrastructure, such as the installation of transmission lines near the high-voltage substation and the integration of water transport pipelines. The LNG combined heat and power plant designated for the Yongin industrial complex, intended to fill the power gap, has yet to break ground due to local opposition and delays in environmental impact assessments and permitting processes.
Experts emphasize the urgent need for 'track separation' and 'targeted support' to ensure the rapid development of the Yongin cluster while still promoting balanced development in non-metropolitan areas. They argue that the power and water infrastructure for the already underway mega fab should be classified as a special case for national security, warranting separate budget allocations and administrative support to ensure a seamless process.
Park Jae-geun, a distinguished professor at Hanyang University’s Department of Convergence Electronics, stated, "The semiconductor industry is a race where missing the timing for fab operations can result in losing market leadership globally. The fab, which is on the verge of operation and has already seen astronomical investments, should be prioritized for government support and administrative procedures to proceed without delays, distinct from general infrastructure projects."
* This article has been translated by AI.
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