Formation of 'Smart Semiconductor City Alliance' in Southern Gyeonggi... New Housing Sale Boon

Formation of 'Smart Semiconductor City Alliance' in Hwaseong, Icheon, Yongin, Suwon, Seongnam, Anseong, and Pyeongtaek
Global Semiconductor Key Companies like Samsung Electronics and SK Hynix Located
Joint Semiconductor-Related Ordinances Possible Upon Ministry of the Interior and Safety Approval of 'Special Local Government'
Despite Market Caution, Q4 Housing Prices Continue to Rise, Pre-sale Market Also Favorable

[Asia Economy Reporter Kangwook Cho] Eight local governments in Gyeonggi Province have formed the so-called ‘Smart Semiconductor City Alliance (Sban-yeon)’ and are working to revitalize the regional economy, attracting attention from the real estate market. Additionally, they are pushing for the establishment of a special local government to build a ‘semiconductor alliance,’ raising expectations for an increase in regional real estate values.

According to industry sources on the 19th, the cities currently belonging to the Smart Semiconductor City Alliance include Hwaseong, Icheon, Yongin, Suwon, Seongnam, Anseong, Pyeongtaek, and Osan in Gyeonggi Province. Each of these eight local governments hosts IT advanced industrial complexes, including the headquarters and factories of Samsung Electronics and SK Hynix. A significant portion of this year’s total investment of 51.6 trillion KRW, as announced by the Korea Semiconductor Industry Association, is expected to be concentrated in these ‘Sban-yeon’ areas.

The alliance aims to create sustainable cities centered around semiconductors, as ‘future growth engines’ such as the metaverse, artificial intelligence, and big data are directly linked to semiconductor demand. Especially after the revision of the Local Autonomy Act at the end of last year, which provided the legal basis for forming local government alliances, the approval of the ‘special local government’ they are currently pursuing has become a hot issue.

A special local government can be established with the approval of the Minister of the Interior and Safety when there is a need to handle metropolitan affairs for a specific purpose. It also allows the formation of a joint council with concurrent positions in the form of the European Union (EU), funded by budgets proposed by each local government. Comprehensive decision-making on semiconductor-related matters can be made in the joint council, and joint ordinances can also be enacted.

An industry official said, “Seven of the eight local governments, excluding Osan, are cities at the center of the government’s ‘K-Semiconductor Strategy’ announced in May, and large-scale government investments are planned to build the world’s best semiconductor supply chain by 2030.” He added, “If semiconductor-related new businesses are attracted to the Smart Semiconductor City Alliance and investment and development accelerate, job creation and a large influx of working population will follow, leading to regional economic revitalization and an increase in real estate values.”

Thanks to the enthusiasm for semiconductor industry investment, apartment prices continue to rise despite concerns about a real estate market slump. According to Real Estate R114, apartment prices steadily increased in the fourth quarter, with Icheon rising 6.2%, Anseong 5.6%, Suwon 3.4%, Osan 3.2%, Pyeongtaek 2.6%, and Hwaseong 2.1%.

The apartment sales market is also strong. In January this year, ‘Hoban Summit Granville Phase 2’ in Segyo 2 District, Osan, recorded a first-priority average competition rate of 29.8 to 1. In March, ‘Hillstate Monteroi,’ which received applications, attracted a total of 29,926 applications for 2,107 units, making it the most subscribed in Cheoin-gu, Yongin City, with an average competition rate of 14.2 to 1, filling all housing types.

Kwon Il, head of the Real Estate Info research team, said, “The semiconductor industry is a key industry driving our economy and a core technology attracting attention to the extent of a US-China hegemony struggle surrounding semiconductors, so the future value of the Smart Semiconductor City Alliance is considerable.” He added, “The real estate market in these eight Gyeonggi areas, where jobs and investments are continuously increasing, is favorable, raising expectations for complexes to be sold in the future.”

Perspective view of Hwaseong Bibong District Umirin / Provided by Umi Construction.

As these eight cities build a smart semiconductor alliance to secure future growth engines, demand is also focused on new complexes emerging in these areas. This month, WooMi Construction plans to sell ‘Hwaseong Bibong District WooMirin’ in Block B4 of Bibong District, Hwaseong. It consists of a total of 798 households, all with exclusive areas of 84㎡. Since it is located in a residential land development district, the price ceiling system applies, enabling reasonable home purchase, and excellent infrastructure is also nearby. It is convenient to use the Seohaean Expressway Bibong IC, the Metropolitan Area 2nd Ring Expressway, and the Bibong-Maesong Expressway.

In Icheon, Ilsin Construction is currently selling ‘Humanville Casafore.’ It consists of a total of 338 households with exclusive areas ranging from 62 to 84㎡. Regional mobility is easy via National Road No. 42 and Local Road No. 325, and access to the metropolitan area is convenient with Yeongdong Expressway Deokpyeong IC and Jungbu Expressway West Icheon IC nearby.

There are also public sale units. LH will accept applications for 256 newlywed hope town units in Block A-57-2 of Pyeongtaek Godeok International City on the 10th and 11th of this month. Additionally, in Osan, Line Construction plans to sell ‘Osan Segyo EG the 1,’ consisting of 1,132 units with exclusive areas ranging from 59 to 84㎡.

Supply of residential officetels is also noteworthy. DL E&C plans to supply ‘e-Pyeonhansesang City Gosaek’ in Gosaek 2 District, Gwonseon-gu, Suwon, in May. It consists of a total of 430 units with exclusive areas of 84㎡. Nearby is Gosaek Station on the Suin-Bundang Line, and Suwon Station, where Line 1, KTX, and GTX-C (planned) stop, is also close.