President’s remarks pit Yongin against southern regions over $680 bil. chip cluster

Construction is under way to build a semiconductor cluster in Yongin, Gyeonggi Province, Jan. 20. Yonhap

President Lee Jae Myung’s comments on relocating a semiconductor cluster to southern regions at Wednesday’s press conference have drawn mixed reactions, as some politicians have interpreted his remarks as a clear sign that the government wants Samsung Electronics and SK hynix to move their factories from sites near the capital to southern parts of the country.

While lawmakers representing southern regions welcomed his comments, the mayor of Yongin in Gyeonggi Province — the city where the cluster is located — criticized the president for adding uncertainty to the 1,000 trillion won ($680 billion) project.

“Yongin residents had hoped the president would resolve the dispute, but his ambiguous stance will not calm the ongoing controversy over relocating the semiconductor industry,” Yongin Mayor Lee Sang-il, a member of the main opposition People Power Party, said in a radio interview Thursday. “Although the president said he cannot overturn decisions made under previous administrations, he still raised questions about the supply of electricity and water.”

At the nationally televised New Year’s press conference, the president said the government would “persuade or induce” companies to build their semiconductor facilities in regions with sufficient electricity supply, citing growing controversy over transferring electricity from the south to Yongin and the area’s water supply for the cluster.

“Economic incentives are key,” he said. “The government has many tools. No government can entirely control the market, but no market can outweigh the power of a government.”

The mayor of Yongin said the president’s comments leave room for different regions to interpret his remarks to their own advantage.

“A ruling party lawmaker who supports moving the semiconductor cluster from Yongin to Saemangeum released a statement praising the president’s press conference,” he said. “This clearly shows that the president did not rule out the possibility of relocating the cluster to Saemangeum.”

A civic group holds a press conference in front of Cheong Wa Dae in Seoul, Jan. 20, to urge the government to reconsider the construction of transmission towers in southern regions to power a semiconductor cluster under construction in Yongin, Gyeonggi Province. Yonhap

Rep. An Ho-young of the ruling Democratic Party of Korea (DPK), who is running for governor of North Jeolla Province and represents Wanju, Jinan and Muju counties, said Wednesday that the president’s remarks reflect his willingness to reconsider the cluster’s location from the perspective of an energy transition and balanced regional development.

Rep. Lee Won-taeg, who represents Gunsan, Gimje and Buan County and is another DPK contender for the province’s governorship, said the same day that the press conference signaled the administration’s support for his proposal to develop the province as an international energy hub hosting various industries.

Amid the growing debate, the companies involved have declined to comment.

However, the Korea Semiconductor Industry Association stressed that the cluster’s location should not be up for negotiation.

“Given the nature of the industry, long-term investment and consistent policy support are essential,” an association official said.

Analysts have also warned that political pressure could prompt firms to consider relocating to the United States instead, especially amid the Donald Trump administration’s call for more memory chip production within the country.

Nomura, a securities firm, said in a Jan. 19 report that Trump’s tariff threat could force Samsung and SK to scale back their planned investments in Korea and divert up to 120 trillion won to the U.S. between 2027 and 2030.