Samsung, SK Hynix Eye Trillions in Semiconductor Investment for Gwangju-Jeonnam

Samsung Electronics and SK Hynix are reportedly in discussions to significantly expand their semiconductor investments in the Gwangju-Jeonnam region, with plans potentially reaching hundreds of trillions of won. This substantial commitment could involve establishing not only back-end packaging facilities but also advanced front-end fabrication (fab) lines, a move that has been a long-standing aspiration for the region.

Sources indicate that the companies are coalescing around a plan to invest over 200 trillion won for Samsung Electronics, with SK Hynix considering an even larger sum. If realized, this would establish a semiconductor cluster in the Honam region valued in the hundreds of trillions of won. The inclusion of fab construction, which involves the intricate process of etching circuits onto wafers, represents a significant upgrade from the initially considered packaging operations, which are less demanding in terms of power, water, and talent.

Adding to the potential scale of the investment, there are internal discussions about relocating some of the fabrication lines Samsung Electronics had initially planned for its Yongin semiconductor cluster to the Honam region. The combined investment in the Yongin cluster alone is estimated at 960 trillion won. This potential shift, however, could spark regional tensions, as Yongin's mayor has already voiced strong opposition to any attempts to disrupt the established national industrial complex project there.

The companies' decision to increase investment scope beyond packaging facilities is seen as a strategic move to align with the current government's emphasis on balanced regional development. President Yoon Suk Yeol has met with leaders of both SK Group and Samsung, discussing regional development strategies. Furthermore, projections of a prolonged shortage in memory semiconductors, with the global market expected to exceed 2,000 trillion won by 2027, necessitate additional production capacity.

The Honam region was reportedly chosen due to its robust renewable energy infrastructure and increased government support for non-metropolitan investments. Currently, the companies' primary semiconductor production bases are concentrated in the Seoul metropolitan and Chungcheong regions. This potential expansion signifies a major shift in South Korea's semiconductor manufacturing landscape.