"People Are Leaving"... Yongin Cluster Relocation Debate Hampers Retention of Top 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 potential relocation of the Yongin Semiconductor Cluster to a non-metropolitan area, there have been no official relocation proposals or requests from the government to companies as of now. However, some in and outside the industry cautiously interpret the situation as a signal to relocate only part of the factories currently under construction, rather than to change the entire ongoing plan. As such speculation spreads, uncertainty itself is emerging as the biggest risk on the ground, even more so than any actual policy change. Concerns are especially mounting regarding the recruitment and retention of highly skilled personnel, which is critical for the semiconductor industry.

According to industry sources on January 2, the majority opinion is that the Yongin Cluster has already reached a point where it is difficult to reverse course. SK Hynix has begun constructing a plant within the Yongin Semiconductor Industrial Complex, with the structural framework already rising. Samsung Electronics is also proceeding with land compensation procedures for site development, with the compensation rate currently at approximately 14 percent.

Nevertheless, as statements from politicians and government officials continue, there are signs that Samsung Electronics is closely monitoring the possibility of future policy changes. While there have been no official relocation requests or signals, the possibility of adjusting certain volumes or additional plans during the cluster development process has been mentioned, leading to a growing perception that the situation must be watched carefully.

This debate is particularly sensitive because semiconductors are a people-centered industry. Although 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, immediate response is required when equipment malfunctions or process variations occur, and the proficiency of highly skilled personnel directly translates into productivity.

The problem is that these professionals have clear preferences regarding their workplaces. Industry sources say that most highly skilled semiconductor personnel consider areas south of Pangyo to be essentially non-metropolitan. Even within the Seoul metropolitan area, there is considerable resistance to relocating to the outskirts, and if a move to a non-metropolitan area were to become a reality, there are concerns that turnover rates would inevitably rise. This is not just a matter of workforce supply; it also means that long-accumulated process know-how could be lost in an instant.

Recruiting new talent is also challenging. In non-metropolitan locations, it is difficult to secure master's and doctoral-level talent, and even after hiring, there is a constant risk of early departures. Since semiconductor process personnel can immediately move to competitors after leaving their positions, workforce outflow is effectively equivalent to technology outflow in the industry's view. Ultimately, if the personnel issue is not resolved, plant relocation or dispersion will inevitably lead to a decline in R&D and mass production competitiveness.

Another crucial factor in semiconductor competitiveness is the physical distance between R&D and mass production. To quickly 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 Seoul metropolitan 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 with collaboration between design and software personnel. Advanced semiconductor processes cannot be completed with hardware alone; design (fabless), process simulation, and software analysis must all be conducted simultaneously. Domestic design talent is concentrated in the Pangyo area, making real-time communication essential for process optimization. The more geographically dispersed the workforce, the more collaboration costs snowball.

Overseas cases illustrate these concerns in reality. Taiwan's TSMC has concentrated advanced processes and core R&D in Hsinchu, near Taipei. In contrast, its Arizona plant in the United States has faced delays in production schedules due to difficulties in securing highly skilled personnel.

Ultimately, the debate and uncertainty surrounding the potential relocation of the Yongin Semiconductor Cluster boil down to the impact on personnel and the field. Industry insiders agree that if the government has no plans to request relocation, it should make this clear. An industry official stated, "In the semiconductor industry, it is not the buildings or equipment that are shaken first, but the people," adding, "Policy signals that increase personnel anxiety, regardless of intent, can undermine the nation's semiconductor competitiveness itself."