On the 23rd, Samsung Electronics Chairman Lee Jae-yong inspected the HBM packaging line at the Cheonan campus.
At the policy table on the 29th, investment in the Honam region is expected to be discussed at a regional-balanced development meeting chaired by the president.
With the capital region constrained by power and land, Honam, which has abundant renewable energy, is drawing attention.
The Honam semiconductor plan has moved beyond a local long-held aspiration and onto the national policy agenda. A clear outline is expected to emerge at the meeting chaired by President Lee Jae-myung on the 29th.
The president’s movement is being read as a signal. On the 23rd, he visited Samsung Electronics’ Cheonan campus in South Chungcheong Province and checked the HBM packaging line. Cheonan is a back-end processing hub where wafers with circuits etched into them are cut into chips, packaged, and inspected.
The connection is here. As speculation about attracting the project to Honam circulated in political circles, this back-end packaging plant was the one that came up as a likely candidate.
Compared with front-end manufacturing, back-end processing uses less water and power. It also requires far lower cleanroom standards, so site selection is less constrained. That is the primary reason Honam has emerged as a candidate for this type of facility.
The timing also aligns. Lee is reportedly expected to meet President Lee soon to discuss semiconductor investment in the Honam region. On the 29th, the president will also chair a non-capital-region investment meeting. That is why some are reading his visit to a back-end facility as preparation for investment in Honam. Samsung Electronics, however, has cautioned against overinterpreting the visit, saying it was to check HBM supply.
Government signals are pointing in the same direction. Industry Minister Kim Jung-kwan said at a briefing for reporters at the government complex in Sejong on the 22nd, “I think we need a new semiconductor complex in addition to existing sites.” On the possibility of attracting the project to Honam, however, he avoided a direct answer, saying only, “I will speak at an appropriate time.” Inside the government, a plan for a “southern region semiconductor innovation belt” linking advanced packaging in Gwangju, power semiconductors in Busan, and materials and components in Gumi is being refined.
Why is it harder to build more in the capital region? What does Honam have, and what is it lacking? Where will the vast amount of electricity come from?
The reason it is difficult to add more factories in the capital region comes down to land and electricity. Specifically, this refers to mega fabs for front-end processes where circuits are etched.
First, electricity. The power used by the Yongin semiconductor cluster alone is expected to reach 15 gigawatts (GW). Of that, only 4.5GW is to be supplied within the complex itself. The rest must be brought in through long-distance transmission from power plants far away.
This is the fate of front-end manufacturing, where lithography, etching, deposition equipment, and cleanroom air conditioning consume enormous amounts of electricity. Even when expanded to the entire capital region, the situation is similar. The electricity consumed exceeds the electricity generated locally. Shortfalls are covered by non-capital regions.
Building new transmission lines is the key issue. New transmission lines planned to send power to Yongin are expected to span more than 1,000 kilometers. Residents have strongly opposed transmission towers wherever they are placed. Similar conflicts have repeated in Miryang, Cheongju, and Gongju. In many sections, completion has been delayed by years due to slow permitting. The very structure of running capital-region factories by installing transmission towers in non-capital regions clashes with the rationale of balanced national development.
Land is also tight. The Yongin, Pyeongtaek, and Hwaseong areas have already undergone extensive development. It is not easy to secure large new sites, and land prices are high. Even in the capital region, where infrastructure is already in place, it takes six years from the planning stage to the first fab going into operation at the Yongin cluster. That is in the most favorable location possible.
The fact that it is difficult to push more front-end production into the capital region is what creates room to shift back-end processing elsewhere.
Honam has wind, sunlight, and vacant land.
The background to Honam’s rise is a resource the capital region lacks: renewable energy.
Honam ranks first nationwide in solar and offshore wind potential. More than half of all approved power generation projects nationwide are concentrated in the region. A world-scale offshore wind project of 8.2GW is being pursued off the coast of Sinan. In Haenam’s Solaseado, there are plans to expand the solar complex to 5.4GW by 2030.
This matters for another reason. In the era of artificial intelligence, global big tech companies require their suppliers to use 100% renewable energy, or RE100. Only factories run on renewable energy meet those orders. Honam is the closest region to that standard.
It also has room in land and water resources. Around the Hampyeong Bitgreen Industrial Complex, a site of 1 million pyeong has been secured. Land costs are lower than in the capital region, reducing the initial investment burden. Infrastructure for industrial water supply, connecting metropolitan water systems and local water resources, has also been established. Because it is a coastal location, seawater desalination can also be added if needed.
The nature of back-end semiconductor processing also fits Honam well. Unlike front-end fabs, which require massive electricity and water and extremely clean cleanrooms, packaging has a much smaller burden. Because the share of production workers is higher than that of engineers, it is also easier to use local labor.
Amkor Technology already has a presence in Gwangju. A talent-development plan linking Gwangju Institute of Science and Technology, Chonnam National University, and the Korea Energy Engineering University is moving forward, along with a plan for an AI computing center in Gwangju and South Jeolla Province.
In short, the issue is not that the capital region is losing back-end work because it lacks electricity. Rather, because back-end processing uses less power, it can move to Honam, where resources and policy rationale are both in place.
Honam’s renewable-energy card also has a gap. Sunlight and wind are not constant. Semiconductor factories cannot tolerate even a one-second power outage. AI data centers, which are also being discussed together, draw power 24 hours a day. A power source with fluctuating output alone cannot meet such demand.
That is why the government has brought back nuclear power as a solution. On the 17th, the Site Selection Evaluation Committee of Korea Hydro & Nuclear Power chose Yeongdeok County in North Gyeongsang Province as a candidate site for two new large nuclear reactors and Busan’s Gijang County as a candidate site for the country’s first commercial small modular reactor, or SMR.
Two APR1400 Korean-style large reactors will be built in Yeongdeok, each with a capacity of 1.4GW, for a combined 2.8GW. Completion is targeted for 2037 to 2038. Gijang, adjacent to the Kori nuclear complex, was seen as advantageous because of its operating workforce and transmission network.
The direction has changed. At the start of his term, President Lee Jae-myung was skeptical of new nuclear power plants, saying they take too long to build when electricity is needed immediately. Forecasts of demand from AI and semiconductors changed that judgment. According to government estimates, South Korea’s peak electricity demand will rise from 100GW in 2025 to 138GW in 2040, an increase of nearly 40% in 15 years.
SMRs are one pillar of the solution. Instead of building large reactors in one place, smaller reactors are distributed near power-demand sites. They are essentially tailored power plants placed next to industrial complexes or data centers. However, the addition of more facilities to the southeastern region, where the Kori and Saeul nuclear plants are concentrated, still leaves unresolved concerns over safety and local consent.
The outlook is not rosy across the board. The biggest weakness is that the project would start from bare ground. Land development, foundation work, and structural construction would all have to begin from scratch. If power and water supply are not resolved on time, the entire schedule would slip.
The materials, parts, and equipment supplier ecosystem that has taken root in the capital region over decades does not yet exist in Honam. Semiconductor manufacturing is a highly concentrated industry in which thousands of suppliers deliver components in real time. Industry insiders say convincing this ecosystem to move will not be easy.
That is why the emerging direction is not competition but division of labor. Yongin, Pyeongtaek, Hwaseong, and Icheon will continue to serve as front-end production bases. Gwangju and South Jeolla Province will be developed as new growth pillars for back-end packaging, AI, and renewable-energy-based industrial complexes. The picture is not a “Yongin versus Honam” confrontation, but rather a “capital-region mega-cluster plus southern-region innovation belt.”
The power solution is also more realistic if it is not confined to a single region. Using Honam’s renewable energy together with Yeongnam’s nuclear power, and filling the gaps through transmission networks linking the two, is the practical approach. The so-called energy highway of subsea transmission lines along the west coast that carries electricity produced in Honam is the connector.
The government is considering tax breaks, electricity-rate discounts, and infrastructure support through a special RE100 industrial complex law and opportunity-development zones. The sensible path is to start with the less burdensome back-end sector and gradually build up the ecosystem. If living and educational conditions for workers are not established as well, the factories will stand alone.
No investment has been finalized yet. Companies remain cautious, saying that nothing has been decided. Even so, one thing has changed: Honam semiconductor development has moved beyond a regional wish and onto the national policy agenda. Whether decentralization can embrace both industrial competitiveness and balanced national development will be tested at the meeting on the 29th.