[Reporter’s Notebook] Semiconductor Complex, Political Logic Won't Work

'K-Semiconductor's Future' at Stake
Yongin Cluster Relocation Debate
Only Hindering Progress

"Isn't this fundamentally an issue of trust between the government and businesses?"

When the recent controversy over relocating the Yongin Semiconductor Cluster to the Honam region erupted, a semiconductor industry insider spoke candidly during a phone call with a reporter. The sound of footsteps, which had been audible as the insider was on the move, stopped, followed by the sound of clearing their throat. Then, as if finally releasing pent-up frustration, the insider asked, "While it's difficult to make any official statement regarding the political debate over the relocation, does this really make sense?" This person particularly emphasized the importance of 'trust,' stating that the Yongin Semiconductor Cluster represents a firm promise between the government and the companies involved.

The debate over relocating the semiconductor cluster arose purely for political reasons. Last month, when the Minister of Climate and Energy mentioned the possibility of moving the semiconductor industrial complex to Honam in the context of renewable energy use, it sparked a political firestorm. Lawmakers from the Honam region issued statements, and signs of conflict with the Seoul metropolitan area began to emerge. The main intention was to appeal to regional voters ahead of the local elections scheduled for June this year. Although relocating a semiconductor industrial complex that has already broken ground is no easy task, that did not deter the debate. Until the presidential office issued an official statement on January 8, saying that the relocation of the semiconductor cluster was "not under consideration," semiconductor companies could do nothing but worry. One industry insider said, "I was genuinely afraid that this controversy would continue until the local elections."

The Yongin Semiconductor Cluster is the core base where the dreams of Korean semiconductor companies are taking shape. Some say the future of 'K-Semiconductors' depends on this site. Before selecting it as the forward base for the industry, companies thoroughly considered various factors such as workforce supply, equipment ecosystem, and logistics. With investment amounts reaching hundreds of trillions of won, the review process had to be even more rigorous. In an era where demand for memory chips is surging due to artificial intelligence (AI), speed in building factories has become critical.

However, the controversy over relocating the factories has only served to hinder K-Semiconductors. Falling behind in timing ultimately means losing competitiveness. This lesson can be seen in Japan's past. Japanese companies like Toshiba lost their footing in the semiconductor market largely because they canceled or postponed factory construction projects in the 1990s and 2000s. An industry insider commented, "Relocating the industrial complex could result in repeating Japan's mistakes."

The controversy over relocating the semiconductor complex ended as a mere episode after the presidential office drew a clear line. However, for the companies, it was an unexpected variable that caused significant anxiety. Moreover, it is unclear whether the issue has been completely resolved. Until the local elections are held on June 3, it is certain that the Yongin Semiconductor Cluster will be repeatedly brought up in political debates. Instead of arguing over relocation based on regional interests, isn't it time to discuss constructive ways to strengthen the competitiveness of domestic semiconductor companies?