Big SK Hynix industrial center cleared for Yongin

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Big SK Hynix industrial center cleared for Yongin

The government approved a 120 trillion won ($105 billion) project to build a semiconductor complex in Yongin, Gyeonggi, said the Ministry of Trade, Industry and Energy Wednesday.

On Tuesday, a committee under the Ministry of Land decided to allocate land in the city for a semiconductor complex that will include SK Hynix factories and more than 50 suppliers of chip components and manufacturing equipment.

SK Hynix welcomed the decision. The No. 2 chipmaker has domestic production lines in Icheon, Gyeonggi, and Cheongju, North Chungcheong, but was in need of more land for chip demand that is expected to rise in the future.

“After the factory site is organized in 2022, the company will invest 120 trillion won to build four wafer fabrication plants,” said CEO Lee Seok-hee in a Wednesday statement. “For the 10 years following the completion of our first plant, we will contribute an additional 1.22 trillion won to organize a fund and build centers to promote mutual growth with the suppliers.”

According to the Trade Ministry, the four plants will bring the complex’s production capacity to a maximum of 800,000 wafers per month.

It expects the entire complex to create 17,000 jobs. If construction goes as planned, the complex will start mass production by 2024.

This is the current administration’s first approval of land for an industrial complex in the Seoul metropolitan area.

In Korea, metropolitan areas that are allowed for industrial use are designated by the government and usually allocated through open bids.

In SK Hynix’s case, the company sent a request last month to the Yongin regional government asking for special allocation of land for the complex. The plan was backed by the Trade Ministry, which said it would greatly help Korea’s semiconductor industry.

It received a final nod from the Land Ministry’s committee on Tuesday.

Since it became known last year that SK Hynix was looking for land to build production facilities, regional governments like Gumi in North Gyeongsang and Cheonan in South Chungcheong have asked to be chosen, citing the need for balanced development across the country.

For them, attracting Hynix would have brought new taxes and jobs.

SK Hynix had its eyes on Yongin due to its proximity to the capital with its high-quality work force. The city is in southern Gyeonggi, where more than 80 percent of chip-related suppliers and companies are located.

The only question was whether the government would approve land usage there.

With Hynix’s Yongin plants added to the list, Gyeonggi will have a total of 19 chip plants by 2025, including factories run by Samsung Electronics.

In a government meeting on Wednesday, Finance Minister Hong Nam-ki expressed high hopes for the semiconductor complex, saying it is expected to create an economic value of approximately 188 trillion won.

“The decision came as a result of a swift discussion among related government offices,” Hong said. “The cluster will be based on mutual growth between large- and small-sized companies that will eventually contribute to elevating [Korea’s] global competitiveness.”

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