South Korea to Prioritize Non-Capital Regions for New Semiconductor Clusters

The South Korean government is set to bolster the development of semiconductor clusters outside the Seoul metropolitan area. In a move that will likely accelerate plans for a Honam semiconductor cluster, the Ministry of Trade, Industry and Energy announced new regulations favoring non-capital regions for future cluster designations.

The revised enforcement decree for the "Special Act on Strengthening and Supporting the Semiconductor Industry" clarifies that "balanced regional development" must be considered, explicitly stating a preference for "non-capital regions." This policy aims to address industrial disparities and promote equitable growth across the country.

Companies establishing themselves in these non-capital clusters will benefit from government support for improving residential, educational, and medical facilities. The government will cover at least 50% of infrastructure installation costs, potentially up to 100% for facilities that stabilize supply chains and reduce regional gaps. Additionally, preferential treatment will be given to foreign talent working in these areas, and universities and high schools in non-capital regions will be prioritized for designation as specialized semiconductor institutions.