Hynix denial points to RohThe plan to add another factory to the Hynix Semiconductor factory complex in Icheon, Gyeonggi province has been quashed. The company was originally going to invest 13.5 trillion won ($14.4 billion) to build three assembly lines for 12 inch wafers for semiconductors and hire more than 6,000 workers. The government, however, left the decision pending for six months and then finally opposed the new plant. It only gave permission for the first line in Cheongju, North Chungcheong province. The Roh administration is not going to allow additional factory buildings for Hynix in Icheon.
The company is perplexed. Company officials claim that there are no appropriate sites for a new factory. To acquire land and build a factory in Cheongju would cost the company an additional 730 billion won. Aside from monetary problems, an extra year would be needed for construction, according to information from the company. Hynix is worried because the semiconductor industry moves fast and needs more mass producing facilities. In a worst-case scenario, the company may have to reconsider the entire project.
The government said it is opposing a new factory in Icheon because it wants to protect the water source for the people in the metropolitan area. But we all know that the biggest reason is the government’s balanced development policy, which encourages development in outlying provinces. The idea is to spread development around the country and slow development in the capital.
Hynix waited for the government to decide, but ended up wasting time. In his New Year’s speech Tuesday, President Roh promised “a better business environment and to abolish bureaucratic regulations.” The next day, however, the government ignored a company’s desperate plea to be able to build a factory.
Investment in plants and equipment among the nation’s 200 biggest companies has decreased 1.3 percent, according to research done by the Ministry of Commerce, Industry and Energy. It is the first time since 2001 for plant and equipment investment to shrink, the research claims.
When one considers Korea’s unstable labor conditions, regulations and the worsening domestic and international business environments, the outcome is obvious.
This administration’s policy blocks investment and prevents job creation, but the president is blaming the Kim Dae-jung government for the suffering economy. How long before the president takes responsibility for his policy’s failure?