Samsung Electronics and SK hynix will build the world’s largest and best semiconductor mega cluster in the southern part of Gyeonggi Province with a total investment of 622 trillion won. The Korean government will support this project by creating infrastructure and an investment environment, strengthening the semiconductor ecosystem and securing super-wide gap technologies and excellent human resources.

The Ministry of Trade, Industry and Energy (MOTIE) and the Ministry of Science and ICT (MSIT) laid out the Plan to Create the World’s Largest and Best Semiconductor Mega Cluster on the theme of “the Semiconductor Industry for the Growth of the Korean Economy” at the President’s Meeting with the People chaired by President Yoon Suk-yeol on Jan. 15.

The cluster refers to a region in southern Gyeonggi Province including Pyeongtaek, Hwaseong, Yongin, Icheon, Anseong, Seongnam, Pangyo and Suwon where semiconductor companies and organizations are concentrated. In March last year, the Korean government selected Yongin as a candidate for a national industrial complex to build a semiconductor mega cluster through the Advanced National Industrial Belt Plan.

The announcement revealed the specific direction of the cluster. The cluster, which is currently home to 19 semiconductor production fabs and two research fabs, will have a total of 16 new fabs, including 13 production fabs and three research fabs, by 2047. Samsung Electronics will invest a total of 50 trillion won in the Yongin National Industrial Complex, the Pyeongtaek General Industrial Complex, and the Giheung Research and Development (R&D) Center including one more fab from its original plan, investing 300 trillion won to build five advanced semiconductor manufacturing fabs in the Yongin National Industrial Complex. SK hynix will invest 122 trillion won in the Yongin General Industrial Complex.

The mega cluster is expected to cover an area of 21 million square meters, seven times the size of Yeouido. It will be the largest in the world as it will be capable of producing 7.7 million wafers per month in 2030. The government expects the cluster to generate about 650 trillion won in production and create 3.46 million jobs.

To this end, the government will support the cluster through four key issues -- infrastructure and an investment environment, ecosystem, super-wide gap technology, and excellent human resources. As large-scale power and water supply is essential to semiconductor processes, the government plans to mobilize fast processing procedures such as an approval time-out system to prevent investment delays. In addition, the government plans to reduce a period to build transmission lines by more than 30 percent through the enactment of the Special Act on National Power Grid Expansion.

Following the expansion of a semiconductor investment tax credit to 25 percent in 2023, the government will create an attractive investment environment by increasing the number of technologies eligible for the semiconductor tax credit to 22. It will raise the supply chain independence rate to 50 percent by 2030 from the current level of 30 percent and increase the number of small and medium-sized enterprises with sales of 1 trillion won or more to 10 from the current four. Through the Semiconductor Ecosystem Advancement Program, which will provide preferential loans and guarantees worth 24 trillion won over the next three years, the government also aims to grow the Korean fabless industry and fill 10 of the top 50 global fabless companies with Korean companies.