Labor, infrastructure remain hurdles for Korea's AI megaprojects

President Lee Jae Myung, Samsung Electronics Executive Chairman Lee Jae-yong, left, and SK Group Chairman Chey Tae-won, right, attend a public briefing at Cheong Wa Dae in Seoul, Monday, on the government's megaprojects for artificial intelligence industry development. Joint Press Corps

By Lee Gyu-lee

• Published Jun 30, 2026 2:57 PM KST

Experts warn talent shortages, infrastructure gaps could slow regional chip expansion

Korea’s ambitious plan to build a new semiconductor manufacturing hub in the country's southwestern region and expand artificial intelligence (AI) infrastructure faces growing practical questions over how to secure the workforce and industrial infrastructure needed to support these projects outside the Seoul metropolitan area.

The government on Monday unveiled three flagship megaprojects — semiconductors, physical AI and AI data centers — as new growth engines, backed by more than 1,350 trillion won ($872 billion) in planned public and private investment.

The initiative includes about 800 trillion won to build four memory fabs, two each for Samsung Electronics and SK hynix in the southwestern region, while strengthening existing manufacturing bases in Yongin, Gyeonggi Province, and other sites around the capital region.

SK Group, GS Group and Naver are also expected to invest around 550 trillion won to develop AI data centers with a total capacity of 8.4 gigawatts in the initial phase and expand to 18.4 gigawatts by 2035. Samsung Group and SK Group separately pledged a combined 4,755 trillion won in long-term domestic investment, including new semiconductor fabrication plants and AI data center projects.

However, despite the unprecedented investment commitments, labor and industrial infrastructure remain the biggest challenges, with experts raising concerns about reallocating experienced engineers from existing facilities in the capital region and building a sustainable recruitment pipeline in regional hubs.

"Moving the existing (engineering) workforce is practically the only way to maintain the required level of expertise because these are new factories built by companies whose core manufacturing operations are already concentrated in the Seoul metropolitan area," said Lee Byung-hun, an electrical engineering professor at Pohang University of Science and Technology.

"The conditions must be attractive enough for employees to relocate, and companies will have to establish a clear system that gives workers a compelling reason to move."

Citing China’s early 2000s hiring campaigns for Korean engineers, Yoo Hoi-jun, an electrical engineering professor at the Korea Advanced Institute of Science and Technology (KAIST), noted that companies should be prepared with compensation packages that include higher salaries and broader support for living conditions.

“The conditions (the Chinese side) offered back then were salaries three times higher, company-provided housing and international schools for employees’ children, and many engineers went,” Yoo said.

“I think the companies will need to offer those kinds of packages that will also include housing and children’s education and should be prepared with them in advance.”

Lee Jong-hwan, a professor of system semiconductor engineering at Sangmyung University, noted that the longer-term challenge extends beyond relocating existing employees, citing the need for cultivating local workers.

“This is an industry that requires a long-term commitment, and employees recruited from outside the region may leave after just a few years,” he said.

“That is why companies ultimately need to hire more locals and work closely with regional high schools, universities and graduate schools to secure production workers, engineers and R&D personnel in advance through industry-academia partnerships and dedicated training programs.”

Infrastructure and ecosystem risks add another layer of complexity.

"You have to plan energy supply first for semiconductor plants. Water, electricity and whether there is an industrial ecosystem nearby all need to be examined before determining the appropriate location,” said Cho Dong-keun, an economics professor at Myongji University.

Lee of Sangmyung University also emphasized that building a regional semiconductor cluster would require supplier companies to relocate alongside chipmakers.

"The key is the semiconductor ecosystem," he said. "Suppliers of semiconductor materials, parts and equipment, many of which are small and medium-sized companies, also need to be in the region to complete the ecosystem. Providing incentives for those partner companies is also a critical task."

Despite the hurdles, the experts expressed cautious optimism that the regional push could ultimately strengthen Korea’s chip industry.

Yoo said dispersing fabs beyond the capital region, as seen with TSMC’s sites spread across Taiwan, can ease pressure on power and water while supporting more balanced regional growth.

“Even in countries like Japan and the United States, you don’t see semiconductor plants being crammed into the capital region. If they are in the capital, the factories inevitably end up competing with large numbers of citizens for electricity,” he said.

“If there’s a power shortage, policymakers will side with the voting public, and you could see situations where factories are temporarily shut down … And those problems can arise if everything is concentrated in the capital.”

Sangmyung University professor Lee stressed that execution should take priority over dwelling on potential obstacles.

“The semiconductor industry is too important for Korea and the country needs to become a global powerhouse. What matters is making early investments and how to execute them," he said. "Now is the right time … So the focus should be on moving ahead now and solving problems as they arise."