Samsung, SK Weigh Up to 9 Fabs for Honam Semiconductor Cluster

Gwangju Mayor Min Hyung-bae's Remarks

"It appears to be taking shape as five for Samsung and four for SK"

A semiconductor cluster planned for the site of Gwangju's military airport in southwestern South Korea may eventually house as many as nine chip fabrication plants.

Gwangju city said on Aug. 14 that the government is reviewing a plan to expand the Jeonnam-Gwangju National Semiconductor Industrial Complex based on corporate demand. At a closed-door meeting with the city council at its Muan office the same day, Mayor Min Hyung-bae said the project had been described as including four fabs, but talks with Korea Electric Power Corp. over electricity supply for the semiconductor complex suggested the plan was now taking shape as five for Samsung Electronics Co. and four for SK Hynix Inc.

Samsung and SK Hynix had previously announced plans to invest 800 trillion won ($576 billion) to build two fabs each, for a total of four, at the military airport site. That means the companies could add semiconductor plants beyond the initial plan.

Gwangju city, the Ministry of Climate, Environment and Energy, Korea Electric Power, Samsung Electronics and SK Hynix signed a power-supply agreement for the Honam semiconductor industrial complex on Aug. 12. The city said that if Samsung and SK were building two fabs each, their electricity-cost burden would have been split evenly. Instead, the cost-sharing ratio in the agreement differed, pointing to the possibility of additional fabs.

The government also said at a Cabinet meeting on Aug. 11 that it was considering a plan to expand the national semiconductor industrial complex planned for the Gwangju military airport site beyond the previously outlined four fabs, depending on corporate demand.

The 8.26 million-square-meter site can accommodate more than four fabs. Gwangju expects construction to begin in 2028, when it takes over the military airport land, with first-phase completion in 2029 and mass production starting in 2030.

A city official said the government and the companies were understood to be reviewing a plan to build as many as nine fabs in total after the first fab is completed in 2029. If the government or the companies signal plans to move ahead with factory construction, the city can prepare follow-up steps, including applying to designate additional industrial-complex land.

Gwangju = Lim Dong-ryul, Hankyung.com reporter exian@hankyung.com