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Criticizing the 'Honam Semiconductor' plan: Is South Korea trying to hinder its future?

From Hankyoreh · () Korean

Translated from Korean, summarized and contextualized by DistantNews.

At a glance

Opinion Named sources New plan
  • South Korea plans a massive 1,000 trillion won investment in three major projects: a semiconductor cluster in the Honam region, a physical AI cluster in Yeongnam, and an AI data center in Chungcheong.
  • The initiative aims to build a large-scale AI industry ecosystem across the southern regions, leveraging semiconductor growth for future economic drivers and national balanced development.
  • Political opposition from within the ruling party criticizes the Honam semiconductor investment, raising concerns about political pressure, regional favoritism, and market competitiveness.

South Korea is poised to unveil a significant national development plan, projecting an investment exceeding 1,000 trillion won (approximately $720 billion USD) across three major "mega projects." Spearheaded by President Lee Jae-myung, the initiative focuses on establishing a comprehensive AI industry ecosystem throughout the southern regions of the country.

The creation of additional, most rational semiconductor industry hubs with government support and corporate decisions.

— President Lee Jae-myungPresident Lee Jae-myung described the semiconductor cluster initiative on his social media account.

The plan includes the creation of a major semiconductor cluster in the Honam region, led by industry giants Samsung Electronics and SK Hynix. Concurrently, a physical AI cluster will be developed in the Yeongnam region, and an AI data center complex will be established in Chungcheong. This strategy aims to capitalize on the explosive growth of the AI industry, which is driving increased demand for semiconductors and necessitating substantial, long-term investments.

The president is pressuring for a Honam trip.

— Jang Dong-hyukA ruling party leader expressed concern about the president's focus on the Honam region for semiconductor investment.

However, the proposed semiconductor cluster in the Honam region has drawn sharp criticism from within the ruling People Power Party. Some lawmakers have voiced concerns, with party leader Jang Dong-hyuk suggesting the president is pressuring for a Honam-centric approach. Others, particularly from the Daegu-Gyeongbuk region, argue that market competitiveness, not politics, should dictate such investment locations. Accusations of "political interference" and "socialist state political directives" have also emerged, alongside claims that the plan serves as a pre-election tactic.

Politics should not compete with the market and competitiveness.

— Daegu-Gyeongbuk lawmakersLawmakers from the Daegu-Gyeongbuk region argued that market forces should guide investment decisions.

The government views this initiative as a critical opportunity to secure future growth engines based on the semiconductor industry and promote national balanced development. The Honam region is considered advantageous due to its available land, water resources, and renewable energy potential. Addressing infrastructure needs like power, water, personnel, and logistics will require close cooperation between the central government, local authorities, and investing corporations. The criticism, however, highlights a growing political tension surrounding the strategic placement of these vital future industries.

Clear abuse of power by the Blue House.

— Ahn Cheol-sooA political figure criticized the government's handling of the semiconductor investment plan.
DistantNews Editorial

Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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