Local elections reignite debate on $680 bil. chip cluster location

Construction is underway for a semiconductor cluster in Yongin, Gyeonggi Province, Jan. 20. Yonhap

Politicians running in the June 3 local elections are adding to uncertainty over a semiconductor cluster under construction in Yongin, Gyeonggi Province, with a combined 1,000 trillion won ($680 billion) investment from Samsung Electronics and SK hynix.

With the government maintaining an unclear stance in the debate over the chip cluster's location, candidates have pledged to attract semiconductor plants to their regions, raising concerns about potential setbacks in the mega project.

Gumi Mayor Kim Jang-ho, who is seeking reelection as a candidate from the main opposition People Power Party (PPP), vowed to bring a semiconductor fab to an industrial complex in his city in North Gyeongsang Province.

"Dispersing semiconductor facilities is a global trend, considering TSMC's dispersion of facilities to four production bases and Japan's construction of chip clusters in both Hokkaido and Kyushu," he said April 14. "Part of the Yongin cluster should be moved to other regions, as the city doesn't have enough electricity and needs over 2 trillion won for the water supply."

Gangwon Province Gov. Kim Jin-tae, who is also from the PPP and seeking another term, reiterated his idea of establishing a chip cluster in the city of Wonju. Another PPP candidate, Rep. Yoo Yeong-ha, pledged a Samsung fab in Daegu before he lost to Rep. Choo Kyung-ho in the party's candidate selection process for the city's mayoral race.

Their campaign promises conflict with those of Yongin Mayor Lee Sang-il, another PPP candidate seeking reelection.

Lee has criticized the current administration for pushing for the cluster's relocation from sites near the capital to southern parts of the country. He also accused Rep. Choo Mi-ae of being deceptive after the ruling Democratic Party of Korea (DPK) candidate for Gyeonggi Province governor denied the cluster would be relocated.

Rep. Choo Mi-ae, center, the ruling Democratic Party of Korea candidate for Gyeonggi Province governor, poses at Samsung Electronics' semiconductor plant in Pyeongtaek, Gyeonggi Province, Friday. Courtesy of Choo's election campaign

During her visit to Samsung's semiconductor factory in Pyeongtaek, Gyeonggi Province, Friday, Choo promised greater momentum for the cluster's construction in Yongin. A day earlier, she asked fellow DPK candidates to help Yongin successfully accommodate the cluster.

The current mayor of Yongin, Lee Sang-il, however, pointed out that Choo opposed the proposed expansion of an electrical substation to power the cluster with electricity from the east coast of the country.

"Yongin residents will not be deceived by Choo's lip service," Lee said. "If she is really concerned about Yongin's future, she should urge the president and the government to maintain the original plan for the chip cluster."

Despite Choo's denial that relocation is being considered, the government has remained ambiguous as to the cluster's future.

In January, when President Lee Jae Myung said he cannot overturn decisions made under previous administrations, he also raised questions about the supply of electricity and water to the cluster, prompting politicians to interpret his remarks to mean that the government wants Samsung and SK to move their factories southward.

Earlier this month, Prime Minister Kim Min-seok said he agrees with the proposed relocation from a broader perspective, though he added that the decision is up to the companies.

Climate, Energy and Environment Minister Kim Sung-whan said last December that the government is reviewing whether the cluster should be moved from Yongin to a region with sufficient electricity supply.

The companies involved have remained cautious about commenting on the debate.

However, the Korea Semiconductor Industry Association stressed that the cluster’s location should not be subject to negotiation, emphasizing the need for long-term investment and consistent policy support.