[Lee Jung-jae Column] A Miracle Born from Desperation

When players of similar skill compete, the outcome usually hinges on their determination. The semiconductor war is no different. On the 15th, Samsung announced it would invest 300 trillion won in Yongin to create the world's largest semiconductor cluster. At first glance, this might seem like any other investment announcement, but looking deeper, it is not. Externally, it reflects a desire to break free from the gravitational pull of the US and China, and internally, it was a courageous move to break the taboos of metropolitan regulations and balanced national development for the country's future. Without the combined determination of Samsung, the government, and local governments working as a cohesive trio, this would have been impossible.

The first source of determination was the President. Semiconductors are the battleground for 21st-century hegemony. Alliances, security, economy, and livelihoods all depend on this. President Yoon Suk-yeol said, "(Advanced industries like) semiconductors are core growth engines and strategic security assets," and emphasized, "The government must firmly support private investment." A presidential office official said, "The President sees this as a matter of national survival." When the Semiconductor Special Act was significantly weakened from the government's original draft at the end of last year, the President expressed anger, saying, "We don't need experts; we need people who get things done."

The reason the Yongin semiconductor cluster is being promoted as a national industrial complex rather than a general industrial complex is also due to the President's determination. General industrial complexes are subject to the approval authority of local government heads. Conflicts between local governments or delays in inter-ministerial consultations often cause construction to drag on indefinitely. It's no exaggeration that it takes "8 years in Korea, 3 years in the US" to build a semiconductor factory. A good example is SK Hynix, which is developing a general industrial complex. After announcing its investment in February 2019, it took 3 years and 10 months before groundbreaking. In contrast, Samsung Electronics' plant in Taylor, Texas, began construction just 4 months after the announcement. The President pushed for a national industrial complex because "speed is important." The Minister of Land, Infrastructure and Transport leads inter-ministerial consultations for national industrial complexes, enabling swift resolution of conflicts and complaints at the government-wide level.

The second key figure of determination is Baek Man-gi, Chairman of the National Intellectual Property Committee. He is a former Ministry of Trade, Industry and Energy official. He takes pride in being a key figure on the government side who helped build Korea's semiconductor industry in the 1980s alongside the private sector. In June last year, he had a private dinner with the President. For about two and a half hours, what he spoke about was "determination."

‘...In the early days, the construction of Korean semiconductor factories was achieved in nine months through a united effort between private companies and the government. At that time, an IBM executive visiting Korea was surprised and asked, "How is this possible?" Morris Chang of TSMC had semi-retired but returned in 2015, setting up a field bed to encourage employees. This was because Samsung had secured some orders from Apple and Qualcomm, creating a sense of crisis. Andy Grove, former CEO of Intel, said, "Only paranoids survive in semiconductor competition..."’

Through such conversations that day, the seed of determination was likely planted in the President's mind. Chairman Baek said, "The emphasis on speed in the national industrial complex and Samsung's investment was probably driven by that kind of determination."

The third source of determination is Lee Sang-il, Mayor of Yongin. He carefully considered his election strategy last year. His choice was semiconductors. Yongin is the southernmost part of the Seoul metropolitan area and the last line for attracting high-level talent. If Yongin fails, nowhere in South Korea will succeed. He went all in on semiconductors. He promised a semiconductor highway and the establishment of a semiconductor Meister High School. Upon winning the election, he immediately formed a semiconductor task force within the transition committee. At the end of last year, he enacted the Semiconductor Industry Promotion Ordinance, the first of its kind among local governments.

He also actively supported Samsung's site selection. He recommended a location further north and closer to the metropolitan area than Samsung initially considered. He reportedly even threatened, "If the SK Hynix Yongin cluster is completed, all the talent will be taken away." Mayor Lee said, "Samsung's investment is expected to create 1.6 million jobs and increase tax revenue by up to 2 trillion won," adding, "We absolutely could not let other local governments take this away."

The day after Samsung announced its investment in Yongin, the Yongin city labor union issued a press release saying, "Mayor, you have done a great job." It is rare for a public servant union to issue such a statement. Comments like "We should give the mayor a performance bonus" were also posted. All of these are miraculous outcomes born from determination.