Jeonnam-Gwangju to Become New Semiconductor Hub, Marking Milestone for Balanced Development

The Jeonnam-Gwangju Integrated Special City, set to launch on July 1, is poised to become the nation's second semiconductor hub, following Gyeonggi Province's Yongin.

According to the semiconductor facility investment plans by Samsung and SK Hynix unveiled today (June 29) at the National Report on the Three Mega-Projects held at the Blue House, 800 trillion won will be invested in the Jeonnam-Gwangju region.

While specific investment locations were not mentioned, Samsung Electronics Chairman Lee Jae-yong referred to Gwangju as a candidate site, and SK Group Chairman Chey Tae-won mentioned the southwestern region, hinting at the investment plan for Jeonnam-Gwangju.

By securing semiconductor fabrication plants (fabs) to serve as a growth engine, following its administrative integration aimed at overcoming the capital-centric system, Jeonnam-Gwangju has established a new milestone for balanced national development.

The government has designated the southwestern region as the primary model for the Korean-style artificial intelligence (AI) industrial revolution and regional economic growth.

The semiconductor production base is scheduled to be built in the Jeonnam-Gwangju Integrated Special City, taking into account the demand for new semiconductor fab sites from companies, as well as infrastructure, residential conditions, and human resources in the southwestern region.

Although the specific site was not disclosed in today's announcement, areas such as the Cheomdan 3 District in Gwangju's Buk-gu, the site of the relocated Gwangju military airport, and Solaseado in Haenam are being discussed, drawing attention to where the factory will be located.

Samsung Electronics and SK Hynix plan to invest 800 trillion won to build a total of four memory fabs, with two each.

President Lee Jae-myung stated, "The Honam region has been alienated from development for a long time, but in some ways, this has become an opportunity. The southwestern coastal area is rich in water resources and, in particular, renewable energy."

President Lee emphasized, "It is the government's job to build infrastructure through support and to make it much more advantageous for companies to invest in this region through tax breaks and all other possible support."

A fab that handles both front-end and back-end semiconductor processes requires large-scale facilities and energy, including a 200,000-pyeong site, 1GW of power, and 20 tons of water per unit.

Due to the nature of semiconductor processes that must operate 24 hours a day, there are many constraints, such as the need for an emergency power supply network.

It takes at least 5 to 10 years for a single fab to be built, including land acquisition, licensing, basic civil engineering, building construction, clean room installation, and equipment move-in.

In the semiconductor industry, speed is crucial, including selecting a site with abundant water, electricity, and affordable land, as well as rapid licensing from local governments.

Jeonnam-Gwangju has been considered an optimal location for building semiconductor production facilities due to its large amount of undeveloped land and abundant water resources.

In addition, Min Hyung-bae, the mayor-elect of the Jeonnam-Gwangju Integrated Special City, has pledged full support for investing companies, adding momentum to the project.

Mayor-elect Min said on Facebook today, "We will prepare concrete support measures that companies can actually feel, including the provision of affordable land. We will firmly support semiconductor investment by using at least 5 trillion won, or even the entire 20 trillion won in integrated support funds promised by the government if necessary."

Accordingly, it appears that national and municipal funds will be provided for the construction of core infrastructure essential for building semiconductor factories, such as ultra-high voltage transmission lines, large-scale water supply networks, and wastewater treatment facilities.

This combination of government financial support and the local government's exceptional incentives is interpreted as one of the factors that led to the investment by Samsung Electronics and SK Hynix in the Honam region.

As Mayor-elect Min Hyung-bae also pledged during his campaign to foster the Gwangju area as a hub for new industries centered on AI, semiconductors, and future mobility, the government and corporate semiconductor belt project announced today is expected to gain further momentum.

Gwangju already possesses an AI cluster, the National AI Data Center, and a foundation for future and eco-friendly car industries; with the addition of semiconductor fabs, it is expected to emerge as a hub for the AI industry.

Mayor-elect Min has been putting all his efforts into attracting large corporate investments by forming a separate Corporate Attraction Special Task Force (TF) within the transition committee, the Jeonnam-Gwangju Great Transformation Planning Committee.

It is reported that the TF's work on attracting memory semiconductor fabs was led by Chairman Jung Eun-seung, a former president of Samsung Electronics, who identified the requirements of large companies and established customized strategies.

The Jeonnam-Gwangju Integrated Special City plans to launch a Semiconductor Strategy Committee on July 1 to begin full-scale support for realizing semiconductor investment attraction.

Once the Southern Region Semiconductor Belt, which fuses AI, energy, and semiconductors, is in operation, the Jeonnam-Gwangju Integrated Special City is expected to establish itself as a leading model for balanced development.

(Photo: Blue House Press Corps, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.