After Chey, South Korea’s Lee to Meet Samsung Chief as Second Chip Hub Plan Nears

Kim Yong-beom Says Talks Are in Final Stages

Samsung, SK Hynix Regional Chip Investment Plan May Take Shape Soon

Samsung Electronics Co. and SK Hynix Inc. could outline a major regional semiconductor investment plan as early as next week. The presidential office said the proposal would not move the chip cluster under construction in Yongin, Gyeonggi Province. Instead, it would add a second cluster to meet surging semiconductor demand.

Kim Yong-beom, the presidential office’s policy chief, made the remarks at a Kwanhun Club forum in Seoul on June 24. Referring to a proposed second semiconductor cluster in areas including Honam and Chungcheong, Kim said discussions are nearing completion. Demand for semiconductors is growing so quickly that facility construction already planned may need to be brought forward. Once details are finalized, the government plans to hold a joint briefing with companies and ministries.

Capital Region Constraints Lift a Second Hub

A key driver behind the regional cluster plan is the lack of capacity in the Seoul metropolitan area. Kim said there is no additional land, power or water available to build more facilities there. That does not mean production must move overseas, he added, arguing instead for the creation of a regional base.

He also stressed that the talks do not mean the Yongin semiconductor cluster would be relocated. Projects already slated for Yongin will still go ahead there, Kim said. The plan is to build a new cluster. Waiting until Yongin is fully completed before starting on the next site would be too late, he added.

Industry officials say Samsung Electronics and SK Hynix may use a public-private meeting at the presidential office on June 29 to announce a large regional investment plan. With the launch of the integrated special city of Gwangju in South Jeolla Province set for July 1, regions including Honam and Chungcheong are being discussed as candidates. The new cluster may include both front-end manufacturing and back-end packaging facilities, according to the industry.

Earlier expectations had centered on back-end investment. Packaging plants require less infrastructure and lower capital spending than front-end fabrication lines. Front-end production demands far larger investment, a supplier ecosystem, skilled labor, and stable power and water infrastructure, making projects outside the capital region harder to execute. Some in the industry say Samsung Electronics and SK Hynix could invest well above 300 trillion won, or about $217 billion, in the regional project.

President Lee to Meet Samsung’s Lee After Seeing Chey

Final coordination between the presidential office and business leaders is continuing. President Lee Jae-myung separately met SK Group Chairman Chey Tae-won on June 19, according to the report. He is scheduled to meet Samsung Electronics Chairman Jay Y. Lee on June 25. Business circles expect expanded investment for balanced regional development to be a key agenda item.

Honam and Chungcheong are the leading candidates for the companies’ regional investment sites. Compared with the capital region, they make it relatively easier to secure large tracts of land and design new power and water infrastructure. The specific location and size of the investment are set to be disclosed after final consultations between the government and the companies.

Optimism that the semiconductor supercycle will persist is also bolstering calls for larger regional investment by the two companies. Chey recently said memory bottlenecks are expected to continue through 2030. He also said the company plans to double semiconductor production capacity on a wafer basis over the next five years.

Hong Min-seong, Hankyung.com reporter mshong@hankyung.com