"Isn't Everything South of Pangyo Considered Non-Metropolitan?"... Local Relocation Debate Hinders Semiconductor Talent [Why&Next]

No Official Government Proposal, but Relocation Rumors Spread
Rising Uncertainty Over Talent Recruitment and Retention

Yonhap News

Amid growing controversy over the possible relocation of the Yongin Semiconductor Cluster to a non-metropolitan area, there have been no official government proposals or requests for relocation made to companies as of now. However, some within and outside the industry cautiously interpret recent developments as a signal to relocate only part of the factories currently under construction, rather than altering the entire ongoing plan. As such speculation spreads, on-site, uncertainty itself is emerging as the biggest risk, rather than any specific policy change. In particular, concerns are mounting regarding the recruitment and retention of highly skilled personnel, which is crucial for the semiconductor industry.

According to industry sources on January 2, most agree that the Yongin Cluster has already reached a point of no return. SK Hynix has begun construction of its plant within the Yongin Semiconductor Industrial Complex, with structures already rising. Samsung Electronics is also proceeding with land compensation procedures for site development, and the compensation rate has reportedly reached about 14%.

Nevertheless, with ongoing remarks from politicians and government officials, there is a sense within Samsung Electronics of closely monitoring the possibility of future policy shifts. While there have been no official requests or signals for relocation, discussions about potential adjustments to specific production volumes or additional plans during the cluster development process have led to a widespread perception that the situation must be watched closely.

This debate is particularly sensitive because semiconductors are a people-centric industry. Although the level of automation is high, the core of actual process operations still depends on highly skilled personnel with master's and doctoral degrees. Line setup, process condition optimization, defect analysis, and yield improvement are impossible without the judgment of experienced engineers. In fabs that operate 24 hours a day without stopping, immediate responses are required when equipment malfunctions or process variations occur, and the proficiency of highly skilled personnel directly impacts productivity.

The problem is that these skilled workers have clear preferences regarding their workplaces. Industry insiders say that most highly skilled semiconductor personnel consider areas south of Pangyo to be essentially non-metropolitan. Even within the greater Seoul area, there is considerable resistance to relocating to the outskirts; if relocation to non-metropolitan areas becomes a reality, there are concerns that turnover rates will inevitably rise. This is not simply a matter of workforce supply; it means that process know-how accumulated over many years could be lost in an instant.

Recruiting new talent is also not easy. In non-metropolitan locations, it is difficult to secure master's and doctoral-level talent, and even after hiring, the risk of early departures remains high. Because semiconductor process personnel can immediately move to competitors if they leave the field, the loss of personnel is effectively equivalent to a loss of technology, according to industry consensus. Ultimately, if workforce issues are not resolved, relocating or dispersing factories will inevitably lead to a decline in research and development (R&D) and mass production competitiveness.

Another crucial factor in semiconductor competition is the physical distance between R&D and mass production. To swiftly apply process technologies developed in research fabs to mass production lines, research and production personnel must frequently interact to solve problems. This is why Samsung Electronics has concentrated its Giheung R&D and Hwaseong and Pyeongtaek production lines within the greater Seoul area. The greater the physical distance, the higher the time costs associated with personnel movement, which in turn slows technological response times.

There are also issues related to collaboration between design and software personnel. Advanced semiconductor processes cannot be completed with hardware alone. Design (fabless), process simulation, and software analysis must occur simultaneously. Domestic design talent is concentrated in the Pangyo area, making real-time communication for process optimization essential. The more geographically dispersed the workforce, the more collaboration costs snowball.

Overseas cases demonstrate that these concerns are real. Taiwan's TSMC has concentrated its advanced processes and core R&D in Hsinchu, near Taipei. In contrast, its plant in Arizona, USA, has experienced production delays due to difficulties in securing highly skilled personnel.

Ultimately, the rumors and uncertainty surrounding the possible relocation of the Yongin Semiconductor Cluster boil down to the impact on personnel and operations. Industry insiders agree that if the government does not plan to request relocation, this needs to be clearly stated. One industry official noted, "In the semiconductor industry, the first thing to be shaken is not the buildings or equipment, but the people," adding, "Policy signals that increase workforce anxiety can unintentionally undermine the nation's semiconductor competitiveness itself."