Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
President signals for incentives for companies to move $680 bil. chip cluster southward
President Lee Jae Myung’s press conference is seen on a television at a real estate agency in Seoul, Wednesday. Yonhap
By Park Jae-hyuk
Lee pledges principles-based probe into Coupang
President Lee Jae Myung indicated Wednesday that the government intends to offer incentives to companies if they relocate their semiconductor plants from sites near the capital to southern parts of the country.
His remarks come amid calls from the ruling party for Samsung Electronics and SK hynix to move their chip clusters currently under construction in Yongin, Gyeonggi Province. The calls, made ahead of local elections scheduled for June 3, aim to disperse the industry across regions to promote more balanced regional development.
While Lee has previously said the companies would not move their facilities even if the government tried to force them, his comments are considered to be signaling the administration's continued desire for the relocation. However, the related companies declined to comment.
During a nationally televised New Year’s press conference, he said the government would encourage companies to build their semiconductor facilities in southern regions, where the electricity supply is sufficient.
While acknowledging the difficulty of reversing decisions made under previous administrations, the president cited growing controversy over the transfer of electricity from southern regions to Yongin and the water supply for the cluster.
“I have heard the cluster will require 13 gigawatts of electricity annually, which will need 10 nuclear reactors,” Lee said. “Will residents in the southern regions tolerate the construction of transmission towers to supply that electricity?”
Lee hinted at various incentives for relocating the cluster southward, including reduced electricity bills, tax benefits, lighter regulations, improved living conditions for workers and lower costs for land, labor and energy.
“Economic incentives are the most important,” he said. “The government has many tools. No government can entirely control the market, but no market can outweigh the power of a government.”
Since Lee told senior executives at Samsung Electronics and SK hynix last month that he hopes the companies will consider regions further south to promote more balanced development, debate has intensified over relocating the 1,000 trillion won ($680 billion) project.
The president also dismissed concerns that the Korean authorities’ ongoing investigation into Coupang over its massive consumer data breach could develop into a trade dispute with the U.S.
In recent weeks, some U.S. politicians have criticized the investigation, calling it an unfair probe into the U.S.-based e-commerce giant, despite the company’s alleged violations and a data breach affecting more than 33 million users in Korea alone. It has been suspected that the company lobbied U.S. politicians to voice support for it.
“No matter whether it is a global company or a small domestic firm, the government will handle the matter based on law and principle,” Lee said. “Considering Korea’s status as a sovereign country, we will deal with this issue confidently and fairly.”