Korea industry minister says government proposed chip sites, companies decided
In short
Industry minister Kim Jung-kwan told a National Assembly audit on Oct 6 that the government proposed candidate sites for the southwestern semiconductor cluster but that companies made the final decision. Asia Economy reported he acknowledged offering Samsung Electronics and SK Hynix multiple candidate sites, including the Gwangju military airport area, while denying the government pressed them. A lawmaker said government and company accounts of the process differ, and Kim separately said Korea must keep a technology lead in HBM and build fabs in Yongin and the southwest quickly.
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Industry minister Kim Jung-kwan told the National Assembly's Industry, Trade, SMEs committee audit on Oct 6 that the government proposed candidate sites for the southwestern semiconductor cluster but that companies made the final decision, according to Newsis, Asia Economy and Chosun Ilbo. Chosun Ilbo reported he said he had looked into the matter because of the controversy. Asia Economy reported that Kim acknowledged the government first presented Samsung Electronics and SK Hynix with multiple candidate sites, including the Gwangju military airport area, but said it did not induce the companies or pressure their investment decisions. [ 1 , 2 , 5 ]
Asia Economy reported the cluster involves Samsung Electronics and SK Hynix investing 400 trillion won each, 800 trillion won in total, to build four memory fabs, with the Gwangju military airport area confirmed as the site and government targets of first fab completion in 2029 and mass production in 2030. It reported that Rep. Cho Ji-yeon of the People Power Party asked whether companies had first proposed southwestern investment to the government, and that Kim replied “there is a part where companies chose the southwest.” According to Asia Economy, Cho said the government and company accounts differ, and a written answer she obtained from SK Hynix cited business economics, the materials-parts-equipment supply chain, technical workforce, site expandability, power and water supply, and “government policy plans for balanced regional development” among the factors behind the site decision. Kim rejected the suggestion of a factual dispute, saying he does not see it that way because both the government and companies had to review various sites from multiple angles, Asia Economy reported. [ 2 ]
Asia Economy also reported that Kim had told the committee in a plenary session in August that the government presented multiple candidate sites when companies needed additional production sites, acknowledging at the time that areas outside Honam were among them without disclosing which. [ 2 ]
Asked about Korea's competitiveness as Chinese chipmakers grow, Kim said Korea must hold a technology edge in HBM and other advanced semiconductors, build fabs quickly in Yongin and the southwest, and strengthen parts suppliers, which he called the industry's biggest weakness, Newsis reported. He said Korea had raised its share in materials to 50 percent and that parts offer similar room, and that SK Hynix's Trinity fab and a demonstration fab should help suppliers, Newsis reported. Newsis also reported Kim saying that without Dutch ASML EUV equipment, not only semiconductors but all AI business would be hard to proceed, and that no target area in the ASML ecosystem has been decided yet. [ 3 ]
On criticism that mega-project budgets are concentrated in Honam, Asia Economy reported Kim saying the Honam-related budget is part of the integrated financial support project tied to the Jeonnam-Gwangju administrative integration, a roughly 20 trillion won framework premised on revising the special integration law and operated with respect for local government autonomy. Maeil Business published a photograph of Kim answering questions at the audit. [ 2 , 4 ]
Why it matters
The testimony concerns an announced memory fab cluster that Asia Economy described as an 800 trillion won investment, one of the largest industrial projects reported in the documents, and a dispute over how its location was chosen. Kim tied the project to holding Korea's position in HBM and other advanced chips, which he said depends on faster construction and stronger domestic materials, parts and equipment suppliers. The documents do not say what, if anything, will change in the site selection or in the budget process.
Key facts
- Industry minister Kim Jung-kwan made the remarks at the National Assembly's Industry, Trade, SMEs committee audit on Oct 6. [ 2 , 3 , 4 , 5 ]
- Kim said the government proposed candidate sites and that companies made the final decision. [ 1 , 2 , 5 ]
- Asia Economy reported Kim acknowledged the government first offered Samsung Electronics and SK Hynix multiple candidate sites, including the Gwangju military airport area, and said it did not induce or pressure their investment decisions. [ 2 ]
- Asia Economy reported the cluster involves Samsung Electronics and SK Hynix investing 400 trillion won each, 800 trillion won in total, for four memory fabs, with the Gwangju military airport area confirmed as the site and government targets of first fab completion in 2029 and mass production in 2030. [ 2 ]
- Asia Economy reported that Rep. Cho Ji-yeon said the government and company accounts differ, and that an SK Hynix written answer she obtained listed business economics, the materials-parts-equipment supply chain, technical workforce, site expandability, power and water supply and government policy plans for balanced regional development among the factors in the site decision. [ 2 ]
- Newsis reported Kim said Korea must keep a technology lead in HBM and other advanced chips, build fabs quickly in Yongin and the southwest, and strengthen parts suppliers, which he called the industry's biggest weakness. [ 3 ]
- Newsis reported Kim said that without Dutch ASML EUV equipment, not only semiconductors but all AI business would be hard to proceed, and that no target area in the ASML supply ecosystem has been decided. [ 3 ]
Confirmed by several sources
Still unclear
- Whether the companies first asked the government for a southwestern site, or the government first proposed specific locations. Asia Economy reported that Rep. Cho Ji-yeon said the government and company accounts differ and that SK Hynix's submitted answer did not say it proposed a specific region first, while Kim said the government proposed candidate sites and companies decided; the other documents do not address the question directly.
- The full terms of SK Hynix's written response and which body it was submitted to. Only Asia Economy describes the response, citing Rep. Cho; no other document mentions it.
- How much of the 20 trillion won regional financial support framework is tied to the semiconductor project. Only Kim's rebuttal in Asia Economy mentions the figure and the Jeonnam-Gwangju administrative integration framework; no other document gives details.
- What specific parts of the ASML EUV supply ecosystem Korean suppliers might target. Only Newsis reports Kim saying no target has been decided and that the government will sort out what is feasible.
What local media are saying
Timeline, local time
- Newsis reports Kim saying the government proposed the southwestern semiconductor site while the final decision was the company's. [ 1 ]
- Asia Economy publishes Kim's audit remarks that the government proposed candidate sites, including the Gwangju military airport, but that companies made the final choice, along with the exchange over SK Hynix's written response and regional budgets. [ 2 ]
- Newsis reports Kim saying HBM technology superiority and early construction of fabs in Yongin and the southwest are important, and calling materials, parts and equipment the industry's biggest weakness. [ 3 ]
- Maeil Business publishes a photograph of Kim answering questions at the audit. [ 4 ]
- Chosun Ilbo reports Kim saying companies needed production sites, the government proposed them and the final decision was made by companies, adding that he looked into the matter because of the controversy. [ 5 ]