About 40% of the essential power supply for the government-backed Yongin semiconductor national industrial complex remains without a confirmed plan, as transmission grid construction faces resistance from local residents and nuclear power plant construction proves difficult. With President Lee Jae-myung personally acknowledging the inevitability of transmission cost burdens, production cost pressures on Korea's semiconductor industry are expected to intensify.
At a briefing on K-semiconductor vision and development strategy for the AI era held at the Presidential Office in Yongsan on January 10, it was revealed that supply plans for 6GW—40% of the complex's required 15GW—have not yet been finalized.
The power supply issue arose when President Lee questioned plans for the Yongin semiconductor complex. "Transmission grid construction near the Yongin semiconductor complex is not easy," Lee said. "Nuclear power is also difficult, and I'm curious about that problem."
Vice Minister Lee Ho-hyun of the Ministry of Climate, Energy and Environment responded that power supply to the Yongin complex is "the most important issue." He explained that plans have been prepared to supply power from nearby plants and through long-distance transmission from the Honam region, timed to the operation schedule of semiconductor fabs within the complex.
Resident opposition to long-distance transmission was identified as a key challenge. "There are difficulties including resident acceptance in four to five regions in South Chungcheong and North Jeolla provinces where transmission lines would pass," Vice Minister Lee said.
"It is extremely difficult to build transmission lines to bring in externally produced power," President Lee said, before asking about the current power supply situation for Samsung Electronics (005930.KS) and SK hynix (000660.KS).
Jun Young-hyun, Vice Chairman of Samsung Electronics, responded that "6GW out of 9GW has been secured, and the remaining 3GW is under discussion with the climate ministry." Kwak Noh-jung, CEO of SK hynix, said "only 3GW out of 6GW has been secured."
After hearing from both companies, President Lee said that "depending on transmission cost burdens and the principle of local production for local consumption, power costs could be reversed going forward," adding that costs "cannot help but be reflected in production costs." He continued, "As I mentioned, my position is that balanced regional development would be preferable—it would be good if this were done in the regions."
Industry observers interpreted the president's remarks as effectively directing semiconductor production facilities to be built in regions like Honam that have greater power generation capacity. However, critics point out this ignores realities such as talent recruitment challenges. The industry has voiced concerns, arguing that government-level support is desperately needed amid the ongoing semiconductor supremacy race. China, in particular, maintains production competitiveness through government-subsidized low electricity rates, and critics note Korea alone is moving against this trend.
"Given that semiconductors are a national strategic industry, bold support is necessary," an industry official said. "Active consideration should be given to measures such as regulatory easing for small modular reactors as a solution to the power shortage."
SK hynix and Samsung Electronics have secured large-scale semiconductor complex sites in Yongin. SK hynix began construction first, planning to invest a total of 600 trillion won to sequentially operate four fabs within the Yongin semiconductor cluster. The company aims to complete its first fab by May 2027, having begun construction in February this year.
Samsung Electronics plans to first build P5 (Pyeongtaek Plant 5) on available land within its Pyeongtaek campus before constructing new fabs at the Yongin site. Samsung plans to begin construction of its first fab at the Yongin national industrial complex in December 2026, with operations starting from 2030. The company plans to build a total of six fabs at the national complex, with investments of 360 trillion won planned to date.
