Samsung Electronics and SK Hynix have made progress in securing a 'carbon-neutral power grid,' which has been a significant hurdle in the global AI chip procurement race. With major tech companies pushing for RE100 (100% renewable energy usage), the government is moving towards national legislation, alleviating uncertainties surrounding renewable energy procurement for the Yongin semiconductor cluster.
According to the government and industry sources on August 5, the Yongin semiconductor cluster, a key production base for Samsung and SK Hynix, is expected to benefit indirectly from the establishment of the 'RE100 Industrial Complex Special Law' aimed for this year. This law will elevate the energy self-sufficiency principle, allowing the Yongin fab to significantly increase its access to green power from external sources as the area is developed into a large-scale renewable energy supply hub.
The Ministry of Trade, Industry and Energy announced plans for the new RE100 Industrial Complex Special Law during its second-half work report. The proposal includes designating regions with enhanced renewable energy self-sufficiency, such as the southwestern area, as 'RE100 special zones' to foster a renewable energy ecosystem and connect it to the national power grid. The plan aims to significantly ease regulations on direct power purchase agreements (PPAs) while expanding transmission infrastructure to create a nationwide eco-friendly power supply system.
Previously, the Yongin semiconductor cluster faced challenges in securing renewable energy due to difficulties in land acquisition in the metropolitan area, a lack of transmission networks to bring in power from regions like Honam, and excessive PPA fees.
With the special law, discussions on revising the cost structure for network usage fees and additional costs related to direct power purchase agreements (PPAs) are expected to gain momentum, allowing the Yongin fab to benefit from reduced power procurement costs. Notably, if the construction of the West Coast High Voltage Direct Current (HVDC) transmission network is expedited in conjunction with the RE100 special zone designation, it could accelerate the flow of large-scale offshore wind and solar power, previously constrained by transmission capacity issues, into the Yongin semiconductor lines with minimal power loss.
Samsung and SK Hynix are closely monitoring the detailed implementation plans of this policy. There is a growing concern that even if they produce world-class semiconductors through next-generation high-bandwidth memory (HBM) or advanced process nodes, they could lose supply opportunities if they fail to meet carbon neutrality requirements. For instance, Apple has mandated carbon neutrality across its entire supply chain by 2030, while Microsoft and Google have set similar expectations for their partners to achieve 100% carbon-free and renewable energy usage by around 2030.
Global competitors have already secured large-scale long-term power purchase agreements (PPAs) or rapidly increased their share of green power procurement, particularly in overseas operations. TSMC has signed a 20-year long-term PPA with Denmark's Ørsted to exclusively receive 920 megawatts (MW) of offshore wind power, demonstrating aggressive moves to secure green energy. Micron is also pursuing large-scale long-term PPAs to achieve RE100 in its U.S. operations and has been signing long-term green power purchase agreements in Taiwan and Southeast Asia.
As uncertainties surrounding renewable energy procurement for the Yongin fab diminish, industry attention is focused on the potential impact on K-semiconductors' global carbon neutrality efforts.
An industry insider stated, "If the RE100 special zone is established, the connection between the power grid and transmission infrastructure will be smoother, allowing not only designated cities but also national strategic industrial complexes like Yongin to somewhat mitigate energy risks. This will provide a foundation for meeting the carbon neutrality guidelines of global clients."
* This article has been translated by AI.
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