Samsung, SK Urged to Detail Honam Semiconductor Investment Plans

South Korean tech giants Samsung Electronics and SK Hynix have pledged substantial investments of 400 trillion won each to establish semiconductor fabrication plants in the Honam region. This commitment, formalized through investment memorandums of understanding (MOUs) with the government, aims to create a significant semiconductor cluster in the southwestern part of the country. The announcement was made at a national report meeting on advanced industrial development for the southwestern region, where President Lee Jae-myung emphasized the parallel development of the Honam cluster alongside the existing Yongin cluster.

This concurrent development strategy is intended to alleviate concerns that investment in the Honam region might be delayed until the Yongin cluster is fully established. However, specific details regarding the exact locations and timelines for the Honam cluster remain unspecified. The newly inaugurated Jeonnam-Gwangju Special City plans to finalize these details through discussions with both Samsung and SK Hynix. The government's emphasis on the necessity and speed of developing this "second semiconductor cluster" highlights the urgency of solidifying investment plans.

In contrast, the development of the Yongin cluster has been marked by concrete planning. Samsung Electronics announced in March 2023 a 20-year plan to invest 300 trillion won by 2042 to build five semiconductor fabs in Yongin, with the government designating 7.1 million square meters as a national industrial complex. SK Hynix's four fabs in Yongin, already under development since 2019, have also been elevated to special zone status, receiving national industrial complex-level support. This comprehensive planning for Yongin, encompassing location, timing, and government support, sets a benchmark for the Honam project.

The government has pledged to accelerate the Yongin cluster's development by easing regulations and increasing infrastructure support, potentially shaving up to 12 years off the construction timeline. Plans are also in place to complete the foundational infrastructure, including power and water, for the Honam cluster within five years. While the government is pushing for speed, the success of this dual-cluster strategy hinges on the companies' commitment. Samsung and SK Hynix included clauses in their business plans allowing for adjustments based on market conditions and their own financial environments, acknowledging the volatile nature of AI-driven semiconductor demand. The article stresses that while leveraging national support for the Yongin cluster, the companies must not be passive regarding the Honam investment, urging them to proceed with similar speed and clarity.