‘Ground dumping bomb’ over the regulatory hurdles… Yongin Semiconductor Complex, elaborated by SK

SK Hynix, who was leading the project, is embarrassed as suspicion of speculation on the ground near the semiconductor cluster being built in Yongin, Gyeonggi-do is on the cutting board. With the start of construction at the end of this year, the schedule could be disrupted or it could go up to date.

SK Hynix plans to build 4 semiconductor factories by investing 122 trillion won in the Yongin semiconductor cluster (integrated complex). After completing the semiconductor production line (1 fab) in 2024, the plan is to construct an additional fab each four years. More than 50 domestic and overseas semiconductor material, parts, and equipment companies, including SK Hynix, are planning to move in here.

However, recently, a former government official from the Gyeonggi Provincial Office’s Investment Promotion Division, Mr. A, bought a site near the Yongin semiconductor cluster through a company headed by his wife, and is under suspicion that the market price rose by 2.5 billion won in three years. The police have applied for an arrest warrant for Mr. A on the 2nd.

From the point of view of SK Hynix, it is unpleasant that’noise’ has occurred in the elaborately promoted project. Prolonged investigations related to allegations of speculation may disrupt the schedule. There is also anxiety over allegations of speculation by internal employees that you may not know.

When promoting this project, SK Hynix is ​​said to have worked hard to crack down on internal employees. If any of the employees bought land in advance and suspected of speculation, the 120 trillion won project could be destroyed. Moreover, if speculative wind blows before land purchase, the land price to be paid rises, which is a disadvantage for SK Hynix.

According to Gyeonggi-do and Yongin-si on the 3rd, major administrative procedures were completed when Yongin-si finally approved the Yongin semiconductor cluster project on the 29th of last month.

The Yongin Semiconductor Cluster is a project to build a next-generation semiconductor production base on a 4.16 million m2 site (about 1.26 million pyeong) in Toxic, Godang, and Jukneung-ri, Wonsam-myeon, Cheoin-gu, Yongin-si. In March 2019, the Ministry of Land, Infrastructure and Transport received a special amount of industrial complexes from the Metropolitan Area Improvement Committee, and passed the Gyeonggi Regional Industrial Complex Plan deliberation (in January this year) and the Ministry of Land, Infrastructure and Transport’s Metropolitan Area Improvement Committee deliberation (March). As early as this year, the compensation will be completed and construction will begin.

From 2019, when the news of the development of the Yongin semiconductor cluster was announced, the employment effect of over 15,000 direct employment and 50,000 including partner companies was expected, raising expectations for regional economic development around the Cheoin-gu area of ​​Yongin-si. In the real estate industry, it is estimated that land transactions worth at least 100 billion won were made due to the effect of the Yongin semiconductor cluster development.

SK Hynix needed a site to build an additional factory to expand production. However, it was in a situation where it was impossible to build a factory in the metropolitan area due to the restriction of the’capital factory total amount system in the metropolitan area’. It already has a semiconductor plant in Icheon, Gyeonggi-do.

The total plant capacity system according to the metropolitan area reorganization plan enacted in 1982 is a system that allows new and expansion of factories with a gross floor area of ​​500m2 or more while setting a certain area every three years in metropolitan areas such as Seoul, Incheon, and Gyeonggi.

Due to the factory total system, it is difficult for companies that have factories in the metropolitan area to expand additional facilities. You have to lease external facilities or build a factory in the province. The government has partially eased regulations in the metropolitan area for U-turn companies that have returned from overseas since 2019, and SK Hynix also benefited.

SK Hynix chose Yongin because it is close to Seoul. Due to the nature of the semiconductor industry, which must secure excellent domestic and foreign talents, the farther away from Seoul, the more difficult it is to attract advanced brains.

Organic connection with business partners is also important. The reason is that the infrastructure such as power, water and transportation networks is well established. According to the Korea Semiconductor Industry Association, more than 80% of domestic semiconductor companies (based on member companies) are gathered in the metropolitan area.

SK Hynix is ​​worried that the semiconductor cluster project, which was so difficult to achieve, will spatter. Hynix said, “I am carefully watching the investigation by the police and local governments.”

Reporter Choi [email protected]