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Goal of Creating Global Semiconductor Production Base by 2025

Gyeonggi Province has formulated support plans for semiconductor development following SK hynix and Samsung’s decisions to invest in semiconductor manufacturing facilities in the province.

  • The Gyeonggi Semiconductor Cluster is expected to be created by 2030
    • Combining Samsung’s Giheung, Hwaseong, and Pyeongtaek Plants with SK hynix’s Icheon and Yongin Plants
    • The goal is to become a global semiconductor production powerhouse with 84,000 employees working on up to 19 production lines
  • The semiconductor industry is expected to have a considerable influence on future economic growth and job creation in Korea
    • Gyeonggi Province plans to bolster support and is organizing a task force to create the Yongin Mutual Growth Cluster

In response to SK hynix’s decision to invest KRW 122 trillion in the Yongin Semiconductor Cluster and Samsung’s announcement of its plan to invest KRW 133 trillion into system semiconductors, Gyeonggi Province established support plans to actively encourage their investments.

According to an announcement released on May 15, Gyeonggi Province has begun preparations for a long-term support plan for the semiconductor industry by organizing a task force and establishing a mutually beneficial plan for cooperation based on the expectation that the semiconductor industry will have a considerable influence on the future of Korea’s economic stability.

Research conducted by Gyeonggi Province revealed that nearly half (43.3%) of last year’s domestic semiconductor export volume, USD 54.8 billion out of a total USD 126.7 billion, was attributable to companies based in the province. This is because roughly 64.3% of domestic semiconductor companies are based in Gyeonggi Province. According to the Korea Semiconductor Industry Association, Gyeonggi Province is the region with the most semiconductor companies in Korea with 162 out of a total of 252 companies. This number is three times greater than the 50 companies of second-place Seoul.

Gyeonggi Province currently accommodates: the Samsung Electronics’ Giheung and Hwaseong Plants; the Samsung Semiconductor Plant 1 in Pyeongtaek, which is located in the Godeok International Industrial Complex; and the SK hynix Semiconductor Complex in Icheon. A total of 41,000 employees are working on 10 lines at the Samsung Electronics Giheung and Hwaseong Plants, 4,000 employees on a line in Pyeongtaek Plant 1, and 18,000 employees on two lines in the SK hynix Icheon Plant.

With construction of the SK hynix Yongin Plant as well as operation of the Samsung Semiconductor Pyeongtaek Plant 2 and the SK hynix Icheon M16 Plant starting in March next year, the Gyeonggi Semiconductor Cluster is expected to be fully formed by 2030, when it is projected to become a base for global semiconductor production with 84,000 employees working on up to 19 lines.

Additionally, the Gyeonggi Yongin Platform City that Gyeonggi Province and Yongin City agreed to jointly develop is expected to accelerate the creation of the Gyeonggi Semiconductor Cluster. The Gyeonggi Yongin Platform City will be a self-sufficient urban area equipped with state-of-the-art industrial, commercial, residential, cultural, and welfare facilities on a 2.7-square-kilometer site extending through Bojeong-dong, Mabuk-dong, and Singal-dong in Giheung-gu, Yongin City. The area already has robust industrial infrastructure accommodating the headquarters of major pharmaceutical companies such as Green Cross and Il Yang Pharmaceutical, as well as their manufacturing and R&D facilities, and the nearby Mabuk R&D Complex where nine companies, including Hyundai Mobis, and the Hyundai Technology Research Center are located. In this respect, Gyeonggi Province expects synergies to be realized through the Gyeonggi Yongin Platform City and the Yongin Semiconductor Cluster, where SK hynix recently decided to locate its plant.

Gyeonggi Province will support the successful creation of the Gyeonggi Semiconductor Cluster by all available means and also establish additional support measures.

On April 17, Gyeonggi Province held a Gyeonggi Joint Support Group meeting, led by the Vice Governor for Administration 2 and the Vice Governor of Peace, in which 11 departments participated. At this meeting, the province decided to operate a one-stop intensive support system in order to accelerate the authorization of the use of agricultural lands and mountain areas for the expansion of infrastructure, such as electrical lines, waterworks, and roads. In addition, a semiconductor industry task force was organized within the Industrial Policy Division that will support authorization work. Gyeonggi Province is also considering plans to transform the task force into a standing organization through the administrative reorganization scheduled in July and province-wide promotion of the creation of the semiconductor cluster, because it is expected that the cluster will have significantly positive effects on job creation and the revitalization of the local economy.

Gyeonggi Province and SK hynix are discussing ways in which to cooperate so as to ensure the successful development of the Yongin Semiconductor Cluster. The province plans to both establish the Mutual Growth Cooperation Center, equipped with entrepreneurial research spaces and education facilities for both large companies and SMEs in the Yongin Semiconductor Cluster, and to create a mutual growth fund to support companies that have innovative technologies related to semiconductor equipment, materials, and parts.

Park Shin-whoan, Gyeonggi Province Assistant Governor for Economy and Labor, stated: “The semiconductor industry has had a significant impact on the creation of high-quality jobs, economic growth, and in bolstering the competitiveness of domestic companies. In this sense, it is very important to successfully create the Gyeonggi Semiconductor Cluster. Gyeonggi Province, in order to prevent its support from being focused on just a few companies, is seeking a multifaceted approach to create an industrial cluster for shared growth, where large companies and SMEs can flourish together.”

Source: Gyeonggi-do Provincial Office (https://english.gg.go.kr, May 17, 2019)