Concerns are growing over the feasibility of the South West Semiconductor Cluster, which is expected to be the largest investment since the founding of Korea.
The primary worry is the need for a stable and substantial power supply to establish and operate a large-scale industrial complex comparable to those in Yongin, Pyeongtaek, Icheon, and Cheongju. However, there are currently no clear methods to secure this power.
Ultimately, energy bottlenecks are seen as the biggest obstacle to enhancing semiconductor competitiveness and achieving balanced national development.
Some argue that renewable energy could sufficiently power the South West Semiconductor Cluster. However, semiconductor factories are known for their massive, continuous energy consumption, making them significant 'energy hogs.' Even a slight voltage drop of just one second can lead to production issues, resulting in losses amounting to billions of won. Therefore, securing a stable base power grid is crucial.
At a public briefing held in Gwangju on June 30, Jeon Young-hyun, vice chairman of Samsung Electronics' semiconductor business, emphasized the need to expand nuclear power and actively pursue Power Purchase Agreements (PPAs) to complement the intermittency of renewable energy. He also urged the advancement of LNG combined heat and power generation, highlighting the unique characteristics of the semiconductor industry.
Fortunately, the government recognizes the importance of securing a stable power grid. President Lee Jae-myung mentioned the power issues related to the establishment of the Honam Semiconductor Cluster multiple times during a public-private joint inspection meeting on July 6.
President Lee stated, "Once the infrastructure, including power, is in place, other companies besides Samsung Electronics and SK Group may enter the market. The power issue is particularly critical, and swift resolution is paramount."
He further noted, "Companies are concerned that while there is plenty of renewable energy in the South West, there may be issues with base power. It would be beneficial to proactively address concerns regarding base power supply."
In conclusion, for the South West Semiconductor Cluster to be successfully developed, a stable power supply environment combining nuclear, LNG, and renewable energy must be established.
This conclusion mirrors that of China, which has faced power supply bottlenecks. China operates large-scale nuclear power plants in cities along the west coast and has installed LNG combined heat and power plants near industrial complexes to meet the substantial energy demands of large industrial complexes and AI data centers. They also utilize large solar farms in the Inner Mongolia region and massive offshore wind farms in Hainan to provide renewable energy at specific times, allowing companies to access electricity at lower costs.
There is no better support for base load than nuclear power, which is not constrained by climate or operating hours and can provide large amounts of power affordably and reliably while minimizing carbon emissions. Establishing a demonstration site for small modular reactors (SMRs) along the South West coast could create a base power grid for the semiconductor cluster while positioning Korea to lead in the SMR market.
Building an LNG combined heat and power plant adjacent to the semiconductor cluster could avoid local opposition related to transmission line construction while addressing the critical weakness of renewable energy—its intermittency due to weather. LNG also emits fewer greenhouse gases than traditional coal power, serving as a bridge toward carbon neutrality.
Additionally, continuous investment in expanding renewable energy in the South West is necessary. Interest in RE100 has significantly decreased due to the anti-carbon reduction policies of the Trump administration in the U.S. and the European climate crisis, but the overarching goal of pursuing RE100 for carbon neutrality remains valid. By supplying the abundant renewable energy from the South West to the semiconductor cluster, Korean companies are expected to lower production costs and gain a competitive edge over the U.S., Taiwan, and Japan.
* This article has been translated by AI.
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