A tale of two cities: Korea’s red tape slows SK hynix as U.S. moves faster

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A tale of two cities: Korea’s red tape slows SK hynix as U.S. moves faster

Published: 09 May. 2025, 16:29 Updated: 09 May. 2025, 18:25

Audio report: written by reporters, read by AI

Residents of West Lafayette, Indiana, listen to an explanation about a semiconductor facility on April 24. [DAVE BANGERT]

The city council of West Lafayette, Indiana, approved a zoning change for 121 acres of residential land to allow SK hynix to build a high bandwidth memory (HBM) chip plant on Tuesday.

The site, closer to residential areas, was preferred by the company over the original location. The decision followed a marathon seven-hour overnight meeting, during which six out of nine council members voted in favor after thoroughly reviewing SK hynix’s proposal.

The approval stands in stark contrast to developments back home for the chip firm: On April 30, the Anseong City Council in Gyeonggi unanimously passed a resolution urging the termination of a cooperative agreement related to the Yongin semiconductor cluster. The reason: SK hynix plans to build a liquefied natural gas (LNG) combined heat and power plant within the cluster, near Anseong, which local officials say poses health and environmental risks.

Anseong Mayor Kim Bo-ra had earlier pledged to form a citizens’ committee to oppose the LNG plant and transmission lines and to provide city funding for their activities. The basis is a city ordinance enacted in December 2024, allowing the mayor to support civic groups engaged in conflict resolution with other municipalities.

SK hynix is building semiconductor fabrication plants in both Indiana and Yongin to meet surging demand for HBM chips, a crucial component in AI technologies. Yet the contrasting political reactions in the two locations underscore stark differences in business environments between the United States and Korea.

If progress continues, the West Lafayette plant will begin mass production of HBM chips by 2028, four years after the project’s announcement. In comparison, the Yongin facility, first announced in February 2019, has an operational target of 2027. Despite investing 122 trillion won ($86.3 billion) in Yongin — 23 times the estimated 5.3 trillion won invested in Indiana — SK hynix has faced repeated delays.

The global race to attract advanced chip plants is driven not only by technological and national security concerns but also by the promise of high-quality manufacturing jobs. Indiana expects 7,000 direct and indirect jobs from the West Lafayette facility, with the state government pledging subsidies.

SK hynix CEO Kwak Noh-jung announces an advanced semiconductor packaging investment at Purdue University in West Lafayette, Indiana, in April 2024. [PURDUE UNIVERSITY]

Meanwhile, in Korea, experts say the central government lacks both the willingness and capacity to resolve local conflicts, and that some local governments exacerbate tensions.

“Governments around the world are competing to host semiconductor plants,” said Ahn Ki-hyun, executive director of the Korea Semiconductor Industry Association. “If Korea’s business environment continues to diverge from global standards, we risk falling behind. National support and cooperation from local governments are crucial to protecting our employment base.”

West Lafayette, a midwestern city of 44,000, has been abuzz over the project for a month. In April 2024, SK hynix announced a $3.87 billion investment to build an HBM packaging and research and development facility in the city in partnership with Purdue University, renowned for its engineering school.

Earlier this year, SK hynix asked to relocate to a site closer to the university than originally planned. While the city’s mayor supported the change, the local planning commission rejected it, prompting a vote by the city council. Some residents protested, saying they thought “packaging” referred to a simple boxing facility and claimed they couldn’t live near a semiconductor plant.

The council gave SK hynix the chance to hold three public hearings over the span of a month. The company responded to questions from residents and explained the safety measures for both construction and operations. Mark Lundstrom, professor of electrical and computer engineering at Purdue, told the community that this was a once-in-50-years opportunity for West Lafayette to become a “new Silicon Valley.”

Council member Colin Lee said in an email to the JoongAng Ilbo that considerable time was spent reviewing the proposals.

The council meeting, which began the evening of Monday, ended in the early hours of Tuesday. The outcome: six in favor, three against. The West Lafayette plant will begin mass production of 12-layer or higher-stacked HBM chips in the second half of 2028, with planned supply to major U.S. tech companies like Nvidia.

Residents boycott an environmental impact assessment briefing for the Resource Recycling Center in the Yongin semiconductor cluster general industrial complex in January 2024. [JOONGANG ILBO]

Meanwhile, SK hynix’s 122 trillion won investment in the Yongin semiconductor cluster — a general industrial complex — has faced one setback after another. Negotiations with local residents over compensation dragged on, and the company encountered disputes with Yeoju over water supply and with Anseong over wastewater discharge. It took until February 2025 to break ground, six years since announcing the investment.

Now, the project faces fresh opposition from Anseong over the LNG power plant planned to supply steam to the fabs. On April 28, the Anseong City Council adopted a resolution opposing the construction of the plant, citing its 2.5-kilometer (1.55-mile) proximity to Anseong as a public hazard.

However, industry experts are skeptical. Most LNG combined heat and power plants in the greater Seoul area operate within 50 to 500 meters of apartment complexes — in neighborhoods like Mapo in Seoul, Pyeongchon in Anyang, Bundang in Seongnam and Wirye in Hanam. Moreover, the plant's design has already been altered once to route gas pipelines away from Anseong in response to prior objections.

Anseong’s council also called for canceling a four-way cooperation agreement signed in 2021 between Gyeonggi, Yongin, Anseong and SK hynix. Under the agreement, SK hynix would purchase agricultural products from Anseong while the province would assist with corporate attraction efforts. Plans were also made for a new materials and parts industrial complex in northern Anseong. The city council now argues that “the agreement disproportionately disadvantages Anseong.”

Uncertainty also looms over Samsung Electronics’ plan to invest 360 trillion won to build a national industrial complex in Idong-eup and Namsa-eup in Yongin. The site, spanning 7.28 million square meters, would house six massive fabs, three power plants and more than 60 suppliers of components and materials. But local resistance over compensation, water and electricity may mirror SK hynix’s challenges. At a joint public hearing in June 2024, one resident disrupted the event by throwing feces, turning the venue into chaos.

“To ensure Korea’s survival, we must grow the semiconductor industry,” said Shim Jun-seop, a professor of public service at Chung-Ang University who participated in the Yongin cooperation process. “But we often see local politicians throwing fits over demands for water and electricity access. Since basic local governments struggle to resolve such conflicts, upper-level regional governments must step in to manage them.”

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY SHIM SEO-HYUN [[email protected]]