Samsung and SK to Expand Large-Scale 'Semiconductor Investment' in Honam and Chungcheong Regions

*This content was translated by AI.

It has emerged that Samsung Electronics and SK Hynix are reviewing plans to expand their semiconductor cluster investments, focusing on the Honam region including Gwangju and South Jeolla Province, as well as the Chungcheong region.

On the 24th, it was reported that both companies are coordinating detailed plans to announce a large-scale local investment plan at the joint public-private meeting on 'National Spatial Daejeon (Regional Balanced Nation)' to be held at Cheong Wa Dae later this month, chaired by President Lee Jae-myung.

Both companies are considering establishing both memory semiconductor production plants (front-end processes) and packaging plants (back-end processes) within the semiconductor clusters to be built in the Honam and Chungcheong regions. The front-end process is the core stage of semiconductor manufacturing where circuits are formed on wafers, while the back-end process involves packaging and verifying completed chips to bring them to market as products.

Previously, the industry had anticipated that investment would likely focus on back-end processes, considering infrastructure conditions such as power and water supply. However, with discussions now including front-end processes to foster a semiconductor industrial ecosystem and enhance clustering effects within the region, projections suggest the investment scale could increase significantly.

Considering that the construction cost for a single advanced semiconductor fab (factory) recently reached a minimum of 60 trillion won, some forecasts indicate that the combined investment by both companies could reach 300 trillion to 400 trillion won.

In this regard, President Lee Jae-myung is scheduled to meet with Lee Jae-yong, Chairman of Samsung Electronics, on the 25th. It is also reported that he previously met with SK Group Chairman Choi Tae-won on the 19th. Sources within and outside the business community are raising the possibility that Lee (Chairman) and Choi (Chairman) may directly announce their investment plans for semiconductor factories and artificial intelligence (AI) data centers in Asan, South Chungcheong Province, and Gwangju, respectively.

Initially, it was widely reported that the construction sites for the back-end packaging plants of Samsung Electronics and SK Hynix would likely be the 'Advanced 3 Districts' spanning Gwangju and Jangseong County in South Jeolla Province. However, if they proceed with building front-end fabs as well, the investment areas will inevitably expand. In this context, plans to secure a wider area beyond the 'Advanced 3 Districts' are also being discussed. Additionally, sites such as the Gwangju military airport and ammunition depot relocation area (approximately 2.6 million pyeong), known for its strengths in residential conditions, logistics, and water supply, and the 'Solar City' in Haenam and Yeongam counties (approximately 10 million pyeong), which South Jeolla Province has long desired, could also be added.

Meanwhile, this discussion is also linked to the government's regional balanced development strategy. Furthermore, if semiconductor production facilities currently concentrated in the Seoul Capital Area expand to the southern region including Honam, competition for attracting investment between regions is expected to become even more intense.

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*This content was translated by AI.