Conflict Resolved Between Yeoju City Holding Industrial Water Key
Four Semiconductor Fabs to Begin Construction in Yongin Cluster... First Fab Expected to Operate in 2027
1.2 Trillion Investment Plan to Strengthen Semiconductor Ecosystem Also Underway
[Asia Economy Reporter Kim Pyeonghwa] With the resolution of the industrial water supply conflict with Yeoju City, which had stalled groundbreaking, the SK Hynix Yongin Semiconductor Cluster (industrial complex) has found a breakthrough, signaling a positive outlook for securing SK Hynix’s production base to meet next-generation memory demand. SK Hynix plans to strengthen the semiconductor ecosystem with related partners through an investment of approximately 1 trillion KRW in the cluster.
On the 21st, according to the Ministry of Trade, Industry and Energy (MOTIE) and SK Hynix, MOTIE held a ‘Win-Win Cooperation Agreement Ceremony for the Successful Establishment of the Yongin Semiconductor Cluster’ at the National Assembly main building in Seoul, attended by Minister Lee Chang-yang, People Power Party Emergency Committee Chairman Jeong Jin-seok, the Mayor of Yeoju, and SK Hynix representatives. Accordingly, the development of the Yongin cluster, one of the core projects of the ‘K-Semiconductor’ initiative, is expected to get back on track after three years.
In February 2019, SK Hynix announced plans to invest 120 trillion KRW to build a semiconductor cluster on a 4.31 million square meter site in Wonsam-myeon, Yongin. Since then, it has prepared for groundbreaking by completing permits and consultations for essential infrastructure installations such as power supply. However, the project faced setbacks due to conflicts with Yeoju City over another critical resource, water supply. In May last year, SK Hynix requested permits to build industrial water facilities in Yongin, but approval was delayed as Yeoju City expressed objections. Supplying 265,000 tons of water to the cluster required cooperation from Yeoju City, which holds the permit authority for installing pipelines along the Namhan River, but Yeoju’s refusal led to the cancellation of the groundbreaking ceremony scheduled for July.
Yeoju City had opposed the project, insisting that SK Hynix first present a plan for mutual development with the local community. Due to various regulations protecting the water source and significant resident inconvenience caused by water facility installation, Yeoju demanded alternative solutions. In response, SK Hynix agreed to consider support measures such as social contribution activities for vulnerable groups in Yeoju and semiconductor workforce training. The government plans to provide benefits such as supporting water quality preservation projects in Yeoju.
Within the semiconductor industry, it is expected that SK Hynix will sequentially proceed with the previously delayed schedule, as it has already completed land compensation in the first half of this year and plans to start construction of water facilities within the year. Earlier, SK Hynix announced plans to build four semiconductor fabrication plants (fabs) in the Yongin semiconductor cluster, with the first fab expected to begin construction in 2025 and operations projected for 2027. SK Hynix views the new fab as a critical milestone for expanding capacity in mass production of next-generation memory such as DRAM.
Since more than 50 domestic and international equipment, material, and component partners will also be located in the Yongin semiconductor cluster, it is expected to contribute to strengthening the overall semiconductor supply chain ecosystem. SK Hynix has announced plans to support this with a total of 1.22 trillion KRW. This includes establishing a win-win fund (300 billion KRW), setting up an AI-based win-win cooperation center and related programs (638 billion KRW), and sequentially supporting joint research and development (R&D) with 280 billion KRW.
Park Jung-ho, Vice Chairman of SK Hynix, expressed optimism at the regular shareholders’ meeting held in March, stating, “The Yongin cluster will establish itself as a core base of the semiconductor ecosystem that responds to long-term demand while coexisting with materials, parts, and equipment partners.”
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