“Building more factories is not enough”: South Korea’s three mega-projects need power, water and sweeping regulatory reform

South Korea’s three flagship projects cannot succeed by simply adding more semiconductor factories, a presidential advisory official said at a public forum in Seoul. The semiconductor, physical artificial intelligence and AI data-center initiatives will require a broader overhaul of the systems that support industry.

Kim Seong-sik, vice chairman of the National Economic Advisory Council, called for major improvements to power grids, water supplies and workforce development, alongside efforts to strengthen the semiconductor ecosystem. He also argued that the government should apply bold regulatory exemptions.

The forum, held by the National Economic Advisory Council and the Regulatory Rationalization Committee, also challenged the government’s case-by-case approach to regulation. Jo Jae-han of the Korea Institute for Industrial Economics and Trade said more than half of the semiconductor industry’s requests for regulatory changes were concentrated in eight laws. Requests linked to the Chemical Substances Control Act alone accounted for 15.4 percent, he said.

Participants argued that authorities should review entire bodies of related legislation instead of changing isolated rules whenever companies raise problems. They also called for assessments after implementation to measure the effects of regulations on investment and industrial competitiveness.

For the planned mega-special zones, Seoul National University’s Choi Jong-kwon proposed linking regulatory exemptions to policy support. Authorities should consider companies’ investment plans and the availability of land, electricity and water when selecting sites. Packages could combine policy finance, tax benefits, research and development funding and workforce support with housing, education and medical services to help people settle locally.

Other proposals included unified reviews of development, construction, environmental and safety permits, as well as a general manager for each zone to resolve disputes between ministries and prevent investment delays.

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The three mega-projects must not stop at simply increasing the number of semiconductor factories.