SK Group Chairman Chey Tae-won is beginning to seriously consider the location of the company’s next semiconductor plant after the Yongin cluster. With the limits of the Seoul metropolitan area looming large, attention is shifting to non-metropolitan regions.
“The next thing to prepare after Yongin is the challenge,” Chey said on the 10th in Tokyo, Japan, adding that semiconductor demand continues to rise and the company cannot avoid moving forward somewhere.
The significance of his remarks lies in the timing. They came amid a series of observations from political circles and the government that Samsung Electronics and SK hynix may be expanding their production bases to non-metropolitan regions such as Honam and Chungcheong.
In business circles, there is broad speculation that a specific investment plan could be announced at the end of this month during a meeting between President Lee Jae-myung and leaders of major conglomerates. The two companies have declined to comment, saying they are not aware of any such plan.
Where to build a plant is essentially a question of what kind of land can support it. That criterion is reflected in Chey’s remarks.
Chey outlined four prerequisites for the next plant: power, land, people, and water. “If you are going somewhere, the infrastructure requirements are enormous,” he explained. In short, that is why a semiconductor plant cannot be built just anywhere.
Advanced semiconductor lines consume as much electricity as an entire city and use enormous amounts of ultra-pure water for cleaning circuits. In addition, they require highly trained workers and large, flat land. Sites that satisfy all four conditions at once are rare.
The existing stronghold in the Seoul metropolitan area has reached its limits. The mega-cluster centered on Pyeongtaek and Yongin is already so tight on power and water that it is difficult to accommodate additional AI semiconductor lines.
That is why a new location outside the region has become necessary. The Yongin cluster will be built on 4.15 million square meters of land, with the first fab targeted to begin operations in 2027. For now, the company’s focus remains there.
The first non-metropolitan candidate mentioned is Honam, especially the Gwangju and Jangseong areas. Honam has the country’s greatest potential for renewable energy such as solar and offshore wind, making it favorable for RE100, the initiative for companies to source all electricity from renewable energy.
Another factor boosting the region is Saemangeum. After NVIDIA CEO Jensen Huang described Saemangeum as Korea’s “AI Valley,” Honam has drawn attention as a hub for AI infrastructure. If a semiconductor production base were established there, it could create synergy with an AI industrial complex.
But the limitations are also clear. For a semiconductor plant that must run nonstop 24 hours a day, renewable energy alone is still not enough to provide stable power.
The pool of core talent needed to produce advanced memory chips is also not deep. That is why, in Honam, back-end facilities are being discussed before front-end manufacturing plants.
Front-end manufacturing is the key stage where circuits are etched onto wafers, while back-end processing is the packaging stage in which completed chips are cut and assembled. Amkor Technology, a global back-end semiconductor company, is already located in Gwangju, making it easier to build an ecosystem around it.
Chungcheong is different. SK hynix’s memory production base in Cheongju and Samsung Electronics’ packaging hubs in Cheonan and Onyang are already in place.
This means follow-on investment that connects to existing infrastructure is easier. It is also relatively easier to attract workers because the region is close to the Seoul metropolitan area. That is why Chungcheong is seen as more realistic than Honam for expanding memory lines.
In the end, the calculations for both regions converge on the same question: where can massive amounts of power, water, and labor be supplied most stably?
Honam has the backing of renewable energy and the government’s push for balanced regional development, while Chungcheong has the practical advantage of already operating as an established base. Neither region fully satisfies all four conditions.
Within business circles, there is growing speculation that a specific investment plan could emerge at the end of this month at a meeting between President Lee Jae-myung and leaders of major conglomerates at the presidential office.
The government is moving to draw investment into regional areas through incentives such as tax benefits and differentiated electricity rates. SK’s next plant location is expected to be decided at the point where hard constraints on power, water, and labor meet the policy goal of balanced regional development.