[Manbo Jeongdam] "Korean Silicon Valley at Incheon Airport"... Lee Hak-jae's AI Hub Vision

The World's Only Location... Sufficient Power and Easy Cooling
No Resident Complaints and Close to IT Hub
Attracting Big Tech like Nvidia, MS, AWS
Beyond the Airport, Becoming an AI Hub to Boost National Competitiveness

Incheon International Airport Corporation President Lee Hak-jae is walking in a park near the corporation's headquarters in Jung-gu, Incheon, and giving an interview to Asia Economy. Photo by Jo Yong-jun

Incheon International Airport recently expanded and opened its Terminal 2, increasing its passenger capacity to over 100 million. This elevated it to the status of the world's third-largest mega airport. It is evaluated as having become a global 'mega-hub' airport by absorbing Asian transit demand. However, Lee Hak-jae, President of Incheon International Airport Corporation, did not stop at the 'mega-hub airport' perspective. He envisions attracting AI (Artificial Intelligence) data centers around Incheon Airport to create an 'AI hub,' drawing domestic startups, large IT companies, and even overseas big tech firms to establish a Korean version of 'Silicon Valley.'

President Lee asserted, "While other overseas airports can compete by simply expanding airport size, only Incheon Airport can become an AI hub beyond just an airport." He evaluated that it has the optimal conditions to attract AI data centers, which are the foundation of AI technology.

AI data centers require massive amounts of electricity. They must safely procure external power demand as well as have their own power generation facilities. Incheon Airport Corporation has signed a power purchase contract with Korea Electric Power Corporation (KEPCO) for three times the current usage to ensure 24-hour stable airport operation and supplies power through a triple network. They currently generate 130 MW at their own combined heat and power plant and plan to improve this to increase generation capacity by more than three times. Considering that the farther the power generation facilities are, the higher the cost of installing transmission infrastructure, this also has a cost-saving effect.

Incheon Airport's proximity to the sea is advantageous for cooling AI data centers. Above all, it can minimize resident opposition. Although data center demand has increased due to the explosion of data from AI, it has recently been regarded as a facility that residents avoid, making it difficult to find suitable sites. It is also located not far from Seoul and Pangyo in Gyeonggi Province, where IT companies are concentrated. It is explained to be a suitable location to serve as the center of the semiconductor value chain encompassing the U.S., Japan, and Taiwan.

Incheon Airport Corporation plans to attract overseas 'big tech' companies such as Nvidia, Microsoft (MS), and Amazon Web Services (AWS). President Lee emphasized, "When these companies move in, AI ecosystems will naturally form as various domestic and international equipment and software companies also settle in. Combined with the advantage of being a global mega-hub airport, if talents from around the world gather, the 'Korean version of Silicon Valley' can become a reality, not just a dream."

Below is a Q&A with President Lee.

- You recently completed the expansion and opening of Terminal 2, the largest project since your inauguration.

It is probably one of the best-built and most modern facilities in the world. Until now, the technology and facilities were top-notch, but this time the scale has also reached the highest level. I thank the dedicated efforts of those involved in the four-phase expansion and plan to make Incheon Airport a wonderful airport that becomes a source of pride for the people and the nation. With this opening, it became the world's first airport to have two passenger terminals each capable of accommodating over 50 million international passengers. By applying various digital technologies, it has become a very smart airport, and it is equipped with facilities that consider the transportation vulnerable and pedestrians, making it the warmest airport, I believe. With large screens and indoor gardens among other content, we plan to further strengthen it as an 'airport people want to visit.'

- With the population declining, can the demand of 100 million passengers annually be sustained?

It is definitely possible. We are not simply aiming to accommodate only Korean overseas travelers. Recently, U.S. Delta Air Lines also moved its Asian hub airport from Japan's Narita Airport to Incheon Airport. They chose our country as one of the few hub airports in the world. This allows stable expansion of routes to the Americas. With Korean Air absorbing Asiana Airlines, its bargaining power to connect various overseas regions and route networks has increased. Ultimately, it will be able to absorb a large volume of transit demand from Southeast Asia. It will become a transit airport used by billions traveling to Europe and the U.S. Even considering improvements in inter-Korean relations, Incheon Airport must maintain a scale of around 100 million passengers. If unification occurs, the population will increase by more than 20 million. A mega-hub airport will be necessary to accommodate this. Even if unification does not happen, just improvements in inter-Korean relations can increase transit demand. Didn't Germany start such transportation facility exchanges before unification?

- Such plans must require enormous funding.

Incheon International Airport Corporation already has sufficient self-sustainability. Despite bearing nearly 1 trillion KRW in financial burdens to the state annually, including 400 billion KRW in dividends, 100 billion KRW in local taxes, and 500 billion KRW in national taxes, it generates nearly 1 trillion KRW in operating profit. The four-phase expansion project alone cost 4.8 trillion KRW, and not a single won of government money was used. It has solid financial soundness.

I think this is because there is less government interference and a significant portion operates under market economy principles. While the government sets fees for runway usage, airport facilities, and parking, about half of the non-aviation revenue operates under market economy principles. You can't deliberately charge low rent, can you? Going forward, I believe we need to create a system that balances aviation and non-aviation revenues and enables bold investments.

Lee Hak-jae, President of Incheon International Airport Corporation, is explaining about Incheon Airport at the office in Jung-gu, Incheon. Photo by Jo Yong-jun

- You said you will develop the Incheon Airport area into the center of the AI ecosystem, an 'AI hub.' Can't other airports have such plans?

The location itself is different. Other airports may not have the conditions to build AI data centers at the national level. You can't build AI data centers in the African desert, can you? Incheon Airport has several conditions that only it can meet. First, the site is large. The Incheon Airport site is 56 million square meters, the second largest among the world's top 10 airports. This means it can sufficiently accommodate new location demands. Power supply is also stable. Data centers require massive electricity. Incheon Airport operates 24/7 and already maintains a considerable power surplus. Korean digital technology is world-class. It is full of major IT companies and experts, including Samsung Electronics, LG, and Naver. Being by the sea is also an advantage. Cooling is important for data centers, and we can supply almost unlimited cooling water.

- Is this being pursued concretely?

The site has been decided. Within Incheon Airport's 2nd International Business District, a 17,611 square meter area is planned to host a 40-megawatt (MW) AI data center, research institutions, ventures, and startups. The goal is to select a business operator within this year and complete construction by 2028. We are promoting the attraction of big tech companies like MS, Nvidia, AWS, as well as domestic companies. The plan is not just for an Incheon AI hub but to grow it into a national AI hub.

- That would have significant ripple effects.

The AI hub is expected to generate about 6 trillion KRW in economic effects during the investment phase alone. Over 10 years of operation, it is projected to produce nearly 96 trillion KRW in cumulative effects. Employment of about 20,000 people is also expected. It is anticipated to create synergy effects with the increased passenger capacity of 106 million from the Terminal 2 expansion.

Lee Hak-jae, President of Incheon International Airport Corporation, is being interviewed by Asia Economy at the Airport Corporation office in Jung-gu, Incheon. Photo by Jo Yong-jun

◆ Lee Hak-jae, President of Incheon International Airport Corporation

▲ Born in 1964 in Geomdan-myeon, Gimpo-gun, Gyeonggi Province (now Geomdan-dong, Seo-gu, Incheon) ▲ Graduated from Bupyeong High School and Seoul National University, College of Agriculture, Department of Animal Science ▲ Ph.D. in Community Development from Chung-Ang University ▲ 8th Seo-gu District Council Member, Incheon ▲ 18th, 19th, 20th National Assembly Member (Hannara Party, Saenuri Party) ▲ President of the Korea Canoe Federation ▲ Political Special Advisor to Yoon Seok-yeol's National Campaign Headquarters ▲ 10th President of Incheon International Airport Corporation

Interview by: Choi Dae-yeol, Deputy Head of Industrial IT Department

Compiled by: Lee Min-woo, Industrial IT Department Reporter