Yongin semiconductor complex risks delay over roads, water supply, business lobby warns

Delays in widening roads around SK hynix's Yongin semiconductor cluster could push back the facility's scheduled launch, a business lobby warned Monday, calling on the government to accelerate its Ministry of Land, Infrastructure and Transport notification timeline to support faster cluster development.

The lobby also argued that wastewater recycling facilities should be added to the list of projects eligible for government funding under the enforcement decree of the Semiconductor Special Act, to ensure a stable water supply for the complex.

The Korea Enterprises Federation said Monday it had submitted 41 policy recommendations covering national advanced strategic industries — including semiconductors, displays, batteries, biotech and humanoid robots — to the Regulatory Rationalization Committee and other bodies.

Of the 41 recommendations, 21 focused on semiconductors, the largest share. Concerns were high that delays in building essential infrastructure — roads, water supply and power — could disrupt factory operations.

The Yongin semiconductor cluster is set to begin operating its first fabrication plant (Y1) clean room in February next year. Traffic is expected to surge as vehicles carrying production materials are joined by construction vehicles for the second fab (Y2).

However, the expansion of National Support Local Road No. 57 (Wonsam–Mapyeong), the main access road to the site, is not scheduled to receive its Ministry of Land, Infrastructure and Transport notification until October at the earliest, raising doubts about whether construction can be completed before the clean room goes online.

The federation urged the government to incorporate the road project into the Sixth National and Local Road Construction Plan and move up the notification schedule, noting that the project had already cleared a preliminary feasibility review in August.

The group also called for expanded support to ensure timely delivery of industrial water, specifically recommending that wastewater recycling facilities be explicitly listed as eligible for government funding under the Semiconductor Special Act's enforcement decree.

A wastewater recycling facility in Cheongju with a total project cost of 62.2 billion won ($45.1 million) saw the public sector — combining central and local government funding — cover only 50 percent of the cost, leaving the private sector to shoulder the remaining half.

The federation also proposed allowing companies to directly purchase clean energy produced by large hydropower plants with a capacity exceeding 20 MW and by nuclear power plants.

Direct transactions between large hydro generators and companies are currently prohibited on the grounds that output must be adjusted frequently to maintain grid stability. The Electricity Business Act limits direct power purchase agreements between companies and generators to renewable energy sources only.

The federation recommended amending the Electricity Business Act to allow companies to directly purchase carbon-free power, including nuclear, in line with demands from global technology companies such as Google and Microsoft. It also asked that direct transactions with large hydro generators be permitted first for export manufacturers in national strategic technology sectors.

Battery and display companies, which require heavy upfront capital investment, appealed for access to tax benefits even when running initial losses.

Under the current national strategic technology investment tax credit system, companies deduct credits from their corporate tax liability. Firms with no tax to pay — due to losses — can carry forward unused credits for up to 10 years, but risk losing the benefit if they do not turn a sufficient profit within that window.

The federation urged the government to introduce a direct refund mechanism, as seen in the United States and other countries, allowing companies to receive unused tax credits as cash refunds ahead of schedule.

It also called for extending the carryover period for tax credits from 10 years to 20 years, arguing that industries such as displays require a long lead time between investing in next-generation products and generating returns.

For emerging industries such as robotics, the federation recommended easing personal data regulations and opening government infrastructure to private use. The proposal aims to lower regulatory barriers so that original video and audio data — essential for humanoid robots to perceive and learn from their environment — can be used within designated safe testing zones after receiving approval.

In addition, the federation urged the government to expand access to its computing resources, including GPU capacity, to large corporations. Currently, government GPU resources are available only to small and medium-sized enterprises and startups.

The federation also recommended adding self-driving cars, electric vehicles and other next-generation vehicles, as well as air-source heat pumps, to the list of items eligible for domestic production tax credits. It further called for support to promote the adoption of home appliances equipped with domestically developed AI models and to boost public-sector demand for such products.

Among the 41 recommendations, 20 can be reviewed and implemented without amending existing laws — comprising seven enforcement decree or rule revisions, seven notification or guideline updates, five administrative plan revisions or operational improvements, and one local ordinance change.

The federation asked the National Assembly to swiftly advance the remaining 21 measures requiring legislation through the relevant standing committees. Of these, nine involve amendments to the Restriction of Special Taxation Act, the largest single category.

Kwon Hyeok-min, head of the federation's growth strategy division, said removing institutional barriers blocking corporate investment decisions was critical to strengthening the competitiveness of national advanced strategic industries. "The government and the National Assembly must improve the most tangible, on-the-ground issues first, and at speed, to create an environment where corporate investment can continue uninterrupted," he said.