Samsung, SK Hynix to expand into regions as government pushes semiconductor decentralization

The government is launching a major regional investment drive centered on semiconductors. A series of announcements is expected from late this month, covering expanded investment by Samsung Electronics and SK Hynix in the Chungcheong and Honam regions, the construction of a compound semiconductor research and development fab in Haenam, South Jeolla Province, and the designation of RE100 — or 100 percent renewable energy — industrial complexes. The Lee Jae-myung administration's vision of balanced national development, which aims to spread advanced industry beyond Greater Seoul and create new growth poles across the country, is taking concrete shape.

According to political circles and South Jeolla Province officials, the government plans to unveil the specifics of large-scale regional investment projects at a meeting between President Lee Jae-myung and the heads of major conglomerates at Cheong Wa Dae on June 29.

At his first-anniversary press conference on Sunday, President Lee said the country would advance toward becoming "an industrial powerhouse with an overwhelming edge, where all citizens and every part of the country share equally in the opportunities and benefits of growth." He added that he would "soon present to the public a large-scale investment project that will bring about a great transformation in our growth strategy."

The government and political circles are discussing plans to disperse semiconductor production, currently concentrated in Greater Seoul, to the Chungcheong and Honam regions. The aim is to pursue regional balanced development and foster advanced industries at the same time through new investment or scale-up projects by Samsung Electronics and SK Hynix.

Various formats are under review, including back-end packaging factories. Jangseong and Gwangju in South Jeolla Province and Onyang in South Chungcheong Province have been mentioned as candidate sites. Samsung Electronics is said to be reviewing options including a packaging factory in Gwangju. Observers also suggest SK Hynix could place some back-end facilities, including packaging operations, in the Honam region.

The discussions are tied to the Lee administration's policy of balanced regional development. The government is reviewing ways to expand advanced industry investment beyond Greater Seoul and is also said to be discussing tax incentives and infrastructure improvements as part of the package.

A plan to establish a compound semiconductor R&D fab in the Haenam enterprise city in South Jeolla Province is also expected to be announced in conjunction with the launch of the integrated Gwangju-South Jeolla special city on July 1. Samsung is among the companies confirmed to be participating in the project.

The Haenam enterprise city is also a leading candidate for an RE100 industrial complex, alongside the compound semiconductor industrial park. An RE100 industrial complex is one where tenant companies receive 100 percent of their electricity from renewable sources such as solar and wind power.

The government is reviewing plans to tap South Jeolla Province's abundant solar and offshore wind resources to develop RE100 industrial complexes. Discussions are underway on using state-owned reclaimed land in the Haenam and Jindo areas to build large-scale solar power generation facilities and energy storage systems. The goal is to supply advanced manufacturers with stable and relatively affordable renewable energy.

The RE100 industrial complex is one of the Lee administration's flagship projects — so central that Kim Yong-beom, chief of the presidential policy office, personally briefed reporters on it shortly after the administration took office last July. The government had originally planned to pass the relevant special bill in the National Assembly last year and designate industrial complexes early this year, but delays in the legislation pushed back the schedule. The designation announcement is now expected as early as September or October, following passage of the special bill after the National Assembly's standing committees are constituted in the second half of the year.

The Ministry of Trade, Industry and Energy said that once the special bill passes, it plans to provide robust support — including corporate and income tax reductions and power infrastructure — to encourage active investment by companies moving into RE100 industrial complexes.