SK Ecoplant Takes Charge of Construction with Completion Guarantee
Global Semiconductor Equipment Company 'Tokyo Electron' Confirmed as Tenant
Semiconductor Parts and Materials Companies Gather, Expecting Improved Business Viability
The construction cost procurement for the Yongin Semiconductor Cluster project, which involves hundreds of trillions of won in business expenses, is progressing smoothly. Recently, ‘Yongin General Industrial Complex Co., Ltd.’, which is carrying out the semiconductor cluster general industrial complex development project, completed the procurement of 600 billion won in project financing (PF) for the main project. The entry of Tokyo Electron, a global semiconductor equipment company, has further strengthened the sales viability of the industrial complex.
According to the investment banking (IB) industry on the 12th, Yongin General Industrial Complex secured 600 billion won in PF from a consortium of financial companies including KB Securities, to be used for construction costs within the Yongin Semiconductor Cluster general industrial complex. The PF loan has a maturity of 3 years and 7 months and was executed in two tranches: 500 billion won as senior debt and 100 billion won as subordinated debt, based on collateral and repayment priority.
Yongin General Industrial Complex is the developer promoting the general industrial complex project within the semiconductor cluster. SK Ecoplant (47%), Yongin Urban Corporation (20%), Kyobo Securities (5.6%), Korea Investment & Securities (5.6%), Korea Asset Investment Securities (5.6%), Leading Investment & Securities (5.6%), SK Securities (5.6%), and Samwon Industrial Development (5%) have invested and hold shares.
SK Ecoplant, which has extensive experience in constructing SK Hynix semiconductor factories, is in charge of construction. Groundbreaking began in 2021, with a target completion date set for 2027. During the PF loan process, SK Ecoplant provided a completion guarantee agreement. If the industrial complex is not completed within the deadline, SK Ecoplant will bear responsibility for repaying the principal and interest of the loan on behalf of the developer.
Previously, in 2021, Yongin General Industrial Complex raised 1.5 trillion won in PF for land acquisition and construction costs. Financial institutions such as KDB Industrial Bank, Kookmin Bank, IBK Industrial Bank of Korea, Hana Bank, Kyobo Life Insurance, KB Insurance, and Shinhan Investment Corp participated as lenders. As of the end of the first quarter this year, the outstanding balance of the borrowed funds is approximately 765 billion won.
The Yongin Semiconductor Cluster general industrial complex development project covers an area of 4,156,135㎡ (about 1.26 million pyeong) in Godang-ri, Dokseong-ri, and Jukneung-ri, Wonsam-myeon, Cheoin-gu, Yongin-si, Gyeonggi Province. It is a project to create a cluster where more than 50 semiconductor materials, parts, and equipment companies gather. SK Hynix has invested a total of 120 trillion won and started construction in March 2021.
Yongin General Industrial Complex plans to establish four new semiconductor fabs within the industrial complex, securing a production capacity of up to 800,000 wafers per month, and create a win-win cluster where more than 50 partner companies will move in. It will also support innovative activities such as smart industrial complex application and startup activation.
The total sales revenue from the general industrial complex is expected to be around 4.7 trillion won. Recently, the entry of Tokyo Electron, a global semiconductor equipment company, into the Wonsam general industrial complex has raised expectations for successful sales. Tokyo Electron is a world-class semiconductor equipment company ranked 4th globally and 1st in Asia in terms of sales last year.
Tokyo Electron Korea applied for approval to change the industrial complex plan in Yongin City in March to move into the industrial complex. They requested plans for the installation of a development building and changes in business type to build a research and development (R&D) center in the Wonsam industrial complex. In response, Yongin City gave final approval for the industrial complex plan change.
An IB industry official said, "Although the plan change will incur additional costs such as extra construction expenses, the entry of a global semiconductor equipment company has increased the sales viability of the industrial complex," adding, "Starting with Tokyo Electron’s R&D center move-in, many semiconductor equipment, parts, packaging, and materials companies are expected to actively pursue entry into the industrial complex."
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