A common pledge in the June 3 local elections was "attracting corporations." Without exception, candidates called for attracting companies, creating jobs, and securing tax revenue. Not long ago, Hyundai Motor announced a phased investment plan worth 9 trillion won in Saemangeum, North Jeolla Province. The plan involves investing in AI data centers, a robot manufacturing cluster, and hydrogen production. North Jeolla Province and the company project a total economic impact of more than 16 trillion won and the creation of over 70,000 jobs. With President Lee Jae-myung attending to boost the mood, local residents were thoroughly elated.
Local governments in southern Gyeonggi Province, home to Samsung Electronics and SK hynix, recently struck it rich. The reason is that corporate income tax surged thanks to the semiconductor "super cycle." Icheon, Suwon, Yongin, Hwaseong, and Pyeongtaek saw tax revenue increase by at least 50 billion won to more than 200 billion won this year.
The increase in local taxes in Icheon, home to SK hynix, has been dramatic. It nearly doubled from 311.1 billion won in 2024 to 618.2 billion won in 2025. This year, 808.1 billion won is projected. Just two or three years ago, the level was around "zero won," so it is nothing short of a sea change. It is astonishing that a single company covers 25% of Icheon's entire budget.
Cities that serve as Samsung Electronics hubs are in a similar situation. Suwon's local income tax also surged from "zero won" to the 100 billion won range. Hwaseong, Pyeongtaek, and Yongin also saw increases from hundreds of billions to more than 100 billion won. In addition, Yongin is expected to expand into the trillions of won range after 2027, when the SK hynix semiconductor cluster begins operations. Beyond an increase in tax revenue, the region itself is being transformed. In gratitude, Icheon named the road leading to SK hynix headquarters "SK hynix Road."
When I heard this news, I recalled Toyota City in Aichi Prefecture, which I visited earlier this year. Icheon attached a company name to a road, but Toyota City changed its city name altogether. Toyota City's old name was Koromo City. It was changed in 1959 through a residents' vote and a council resolution. Upon entering Toyota City, the first thing one sees is a "WELCOME TO TOYOTA CITY" sign. It is a symbol showing how much this city treasures Toyota. Besides Toyota's headquarters, Toyota City has Toyota Stadium, Toyota Memorial Hospital, and the Toyota Automobile Museum. Wherever one goes, it is hard to escape the sphere of Toyota's influence. The entire city is organized around Toyota Motor.
Since beginning operations in 1938, Toyota has grown into a global automaker over some 90 years. It produces 10 million vehicles annually and its sales reach 40 trillion yen. Its workforce alone numbers 370,000. Toyota City's population is roughly 400,000, with automobile-related workers estimated at 210,000. This figure includes workers at the headquarters, production and research facilities, and surrounding first- and second-tier parts suppliers. The local economy is closely connected to the auto industry, with a single company holding sway over the local government's finances.
In a regional economy of 4 trillion yen, the automobile industry's share is overwhelming. Local tax revenue is closely linked to fluctuations in the Toyota Group's performance. Local tax revenue rises and falls according to Toyota Motor's booms and busts. In this way, Toyota City has become one with Toyota Motor and built an ecosystem.
The same goes for TSMC in Kumamoto. Kikuyo Town, which I visited last summer, was rapidly transforming into a "TSMC city" just over a year after operations began. Once a cabbage field, it became an entirely different place after attracting the world's largest semiconductor company. The population grew, tax revenue increased, and real estate prices jumped. Roads and transportation networks were expanded, and commercial districts formed. Local real estate offices saw a constant stream of inquiries about rental housing for TSMC employees, and construction of new apartments was underway everywhere. A single factory changed the regional landscape and the radius of daily life.
These cases show why local governments stake their futures on attracting corporations. Attracting companies no longer stops at creating a few jobs. Corporate profits become local tax revenue, and local taxes lead to roads, schools, welfare facilities, and cultural facilities. This is an era in which industry designs the future of cities.
There are shadows as well. The "Samjeon-nix" boom fueled rising home prices in southern Gyeonggi Province. Toyota City and the Nagoya region also experienced rising housing costs and widening regional disparities along with industrial growth. While everyone shares the fruits of growth, someone must also bear the costs of growth. The gap between regions that companies have entered and those that have not has also widened.
Toyota City's auto industry, Kikuyo Town's semiconductor plant, and the semiconductor belt running through Icheon, Suwon, Yongin, Hwaseong, and Pyeongtaek ultimately converge on the same question. Who is it that moves a city — administration or corporations? It has now become difficult to think of the two separately.
It is not wrong for election candidates to call for attracting corporations. But staking a region's fate solely on attracting companies is dangerous. Companies repeat cycles of growth and decline. Regions must be sustainable. The key is not how many companies one attracts, but how the wealth and opportunities companies create are converted into the competitiveness of the entire region. The power to turn a company's growth into a region's asset — that is true competitiveness.
