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The semiconductor industry is a key component of the South Korean economy, accounting for 10% of their economic output
The South Korean government has announced its support for plans to develop a new semiconductor production cluster just outside Seoul, as the country attempts to consolidate its chip production efforts.
The cluster, which will be built across 21 million square metres of land, is expected to create 3 million jobs over the next twenty years, according to a report from the Yonhap news agency.
The plans for the “semiconductor mega cluster”, which were proposed as a hub for chip companies and research centres, were originally announced last year. However, it was only today that South Korean President Yoon Suk Yeol announced the government’s plan to support this project in a policy debate held at Sungkyunkwan University, south of Seoul.
The cluster is expected to be completed through investments totalling 622 trillion won ($472 billion) from firms including Samsung and SK Hynix, who combined already produce and sell 60% of the world’s memory chips.
These investments will reportedly increase the number of chip fabrication plants in the region from 21 to 37 by 2047, including three new research sites. Naturally, this will equate to an enormous increase in chip design and production capacity, with the region set to produce 7.7 million chip wafers monthly by 2030.
Samsung says they will develop six new fabs in Yongin and three new fabs in Pyeongtaek, while SK Hynix will build four fabs in Yongin.
The cluster’s development is set to be complete by 2047.
“Currently our chip sector has 180,000 jobs, but once the cluster is completed, this fab alone will produce 70,000 more jobs,” said President Yoon, reported in the Korea Herald.
The project is expected to generate 3.46 million jobs in total over its duration.
The investment is also expected to result in an increase of 200 trillion won ($151 billion) for related industries including design, parts, and materials.
In the debate, the president also encouraged the use of nuclear power to ensure the stability of the power supply to the plant. “We need a 1.3-gigawatt nuclear reactor to operate a foundry, because a single line consumes more electricity than cities like Daejeon or Gwangju. And it took more than 10 years to set up the electricity infrastructure to run Samsung’s Giheung Campus, which has seven production lines,” he said.
The South Korean government has been moving to further enhance the country’s semiconductor industry in recent years. Companies providing facility investment in semiconductors and other strategic industries have been able to benefit from corporate tax breaks since January 2023, which are set to expire by the end of this year, although Yoon hinted at their extension during the policy debate.
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