Semiconductor plant locations cannot rely on green energy alone

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Semiconductor plant locations cannot rely on green energy alone

Published: 09 Jan. 2026, 00:04

Audio report: written by reporters, read by AI

Kim Won-bae

The author is an editorial writer at the JoongAng Ilbo.

Calls to relocate semiconductor fabs slated for the Yongin semiconductor cluster to Saemangeum in North Jeolla Province mark a departure from conventional regional lobbying for industrial projects. These demands seek to politically overturn a national strategic industry already approved and under construction by invoking access to renewable energy. Asking companies to move fabs that have already broken ground in Yongin is unrealistic and would impose enormous national opportunity costs. The semiconductor industry is not a matter of simply moving buildings. It depends on dense ecosystems of skilled workers, supplier networks and research infrastructure.

Kim Min-seok, prime minister, tours a land-based solar power complex during a visit to the Saemangeum development site in Gunsan, North Jeolla Province, on Sept. 3, 2025. [YONHAP]

The controversy escalated ahead of local elections after some North Jeolla politicians raised the idea and Climate, Energy and Environment Minister Kim Sung-hwan publicly echoed concerns about whether factories should move to regions with more power capacity. Attempting to use central government authority to relocate operating or soon-to-be-operating fabs to areas that have yet to meet basic location requirements is anachronistic and inappropriate. Advocates cite the principle of local production and local consumption of energy, yet it is unclear whether Saemangeum actually meets that standard better than existing sites.

According to the government’s Power Statistics Information System, South Chungcheong Province generated the most electricity in 2024 at 103,618 gigawatt-hours, largely due to its concentration of thermal power plants. In terms of self-sufficiency, North Gyeongsang, South Jeolla and South Chungcheong all exceeded 200 percent, producing more than twice their own consumption and exporting the surplus. North Jeolla produced 15,878 gigawatt-hours, about 15 percent of South Chungcheong’s output, with a self-sufficiency rate of 73 percent. While plans exist to build an RE100 industrial complex in Saemangeum, renewable sources with limited generation hours cannot reliably supply the massive and continuous power demand of semiconductor fabs.

If this logic were applied consistently, regions with higher existing output or self-sufficiency could demand that fabs be moved to their jurisdictions once they add renewable capacity. Such arguments would never end. Political pressure that distorts corporate location decisions ultimately harms the industry and the national economy.

At the same time, the current model in which the Seoul metropolitan area functions as a black hole absorbing provincial power and resources is not sustainable. Regional grievances are clear. Electricity is largely produced outside the capital area, yet power-intensive factories are concentrated around Seoul. While tax revenues collected in the capital are redistributed through grants and subsidies, that mechanism alone can no longer justify persistent concentration.

The solution is equally clear. Instead of pressing the central government to force relocations, regions must compete to create sites companies cannot ignore. Stable electricity supply is necessary but insufficient. Abundant industrial water and livable environments that allow skilled workers to settle, including housing, education and health care, must also be in place.

Japan’s Kyushu region offers a useful comparison. Through long-term coordination between local governments and companies, it built infrastructure, talent pipelines and supply chains to become a semiconductor hub. Investments by firms such as Sony and Taiwan’s TSMC flowed to Kyushu not because it was rural but because it was competitive.

A view on Jan. 15, 2024, of construction underway at the Yongin Semiconductor Cluster site in Yongin, Gyeonggi Province. The government is stepping up support for the creation of a semiconductor mega cluster across southern Gyeonggi, with private companies including Samsung Electronics and SK hynix set to invest a combined 622 trillion won ($428.7 billion) by 2047. [YONHAP]

The same applies to Texas in the United States. In 2024, Texas ranked first in U.S. natural gas production, with gas accounting for 44 percent of power generation. Wind made up 24 percent and solar 10 percent, while nuclear and coal provided additional stability. Combined with aggressive state tax incentives and work force programs linked to universities, this energy mix attracted semiconductor and advanced manufacturing firms. Samsung Electronics chose Texas as a core U.S. production base through corporate judgment, not coercion.

Even within North Jeolla, some politicians now concede that demanding immediate relocation of fabs run by Samsung Electronics or SK hynix is unrealistic. Plans reportedly exist to establish an international school in Saemangeum. Such preparation should come first. Renewable energy must become a foundation of competitiveness, not a bargaining chip.

The central government’s role is to help local governments build these fundamentals, not to assign specific factories to specific regions. The capital area, for its part, must also expand transmission networks and develop its own generation capacity. It cannot assume provincial patience will last indefinitely.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.