Samsung and SK Consider Hundreds of Trillions of Won in Semiconductor Cluster Investments in Honam and Chungcheong Regions

Samsung Electronics and SK Hynix are reviewing plans to expand semiconductor cluster investments in the Honam region, including Gwangju and South Jeolla Province, as well as the Chungcheong region.

The investment scale is estimated to reach hundreds of trillions of won.

According to the business community on June 23, Samsung Electronics and SK Hynix are coordinating details to announce large-scale regional investment plans, including these initiatives, at a public-private joint meeting on "Great Transformation of National Territory (Balanced National Development)" to be held at the Blue House at the end of this month, presided over by President Lee Jae-myung.

It is reported that both companies are considering plans to build both front-end memory semiconductor production facilities and back-end packaging plants within the semiconductor clusters to be established in the Honam and Chungcheong regions.

The front-end process involves forming circuits on wafers to create memory cells and devices during semiconductor manufacturing, while the back-end process involves cutting, packaging, and testing finished chips to make them ready for end-use.

Initially, the industry had anticipated that Samsung Electronics and SK Hynix would focus their investments on back-end processes, considering infrastructure conditions such as power and water supply in those regions.

However, as discussions now include the core front-end manufacturing process to enhance the clustering effect of the semiconductor industry in the region, the possibility that the investment scale will exceed initial expectations has been raised.

Considering that the construction cost of a single semiconductor fab (factory) recently reaches at least 60 trillion won, some observers suggest that the total investment by Samsung Electronics and SK Hynix could reach 300 to 400 trillion won.

In relation to this, President Lee is scheduled to meet with Samsung Electronics Chairman Lee Jae-yong on June 25 to discuss specific investment plans, and it is known that he met with SK Group Chairman Chey Tae-won on June 19.

In particular, there is speculation that Chairman Lee and Chairman Chey may personally announce investment plans for AI data centers, including semiconductor plants, during their respective visits to Asan, South Chungcheong Province (July 2), and Gwangju (June 30).

These discussions are aligned with the regional balanced development strategy pursued by the government.

The government is currently pushing for the "5-Pole, 3-Special" (5 mega-regions, 3 special self-governing provinces) national balanced development strategy and the construction of a southern semiconductor belt.

Furthermore, the inclusion of support measures for semiconductor clusters that consider regional balanced development and special cases for permits in the "Special Act on Strengthening Competitiveness and Support for the Semiconductor Industry" (Semiconductor Special Act), which is set to take effect this August, serves as a background for these companies to consider regional investments.

In a recent press conference marking his first year in office, President Lee stated, "We will move toward becoming a powerhouse in super-gap industries where all citizens and the entire nation enjoy the opportunities and benefits of growth equally. I will soon unveil a large-scale investment project that will achieve a major transformation of our growth strategy to the public."

If semiconductor production facilities, currently concentrated in the capital region, are expanded to the southern regions including Honam, competition for investment attraction between regions is expected to intensify further.
※ Please note: This article was translated by AI and may contain errors.