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Gyeonggi gov't, Kepco sign MOU to build underground power grid for SK hynix's chip fab

Published: 22 Jan. 2026, 19:02 Updated: 22 Jan. 2026, 19:27

The Yongin semiconductor industrial complex in Yongin, Gyeonggi, is under construction on Jan. 20. [YONHAP]

SK hynix cleared a key hurdle for its Yongin semiconductor industrial complex on Thursday as local authorities agreed on a plan that will secure the full 5.5 gigawatts of power required for the chip giant's project.

The Gyeonggi provincial government said it signed a memorandum of understanding with the state-run Korea Electric Power Corporation (Kepco) to build an underground power grid beneath a roughly 27-kilometer (17-mile) stretch of highway connecting Yongin and Icheon.

The plan replaces overhead transmission towers, which had drawn strong opposition from residents, with underground cables to supply electricity to the industrial complex.

Under the agreement, the Gyeonggi government will take charge of paving roads and acquiring land, while Kepco will construct the underground power grid.

“The semiconductor industry relies on massive scale and a stable power supply to remain competitive,” Gyeonggi Gov. Kim Dong-yeon said.

He continued, “The final piece of the puzzle for the Yongin semiconductor cluster's power grid was completed today.”

The agreement allows SK hynix to secure an additional 3 gigawatts of power needed to operate its third and fourth fabrication plants at the Yongin complex, equivalent to the output of two to three nuclear power reactors. The company has already secured 2.83 gigawatts required to run its first and second fabs.

Kepco said it plans to complete construction of the east Yongin substation by July this year, ahead of the scheduled early operation of the first fab in February next year.

Industry sources said the announcement has largely eased concerns over potential power shortages at the Yongin complex. Semiconductor manufacturing requires large amounts of electricity to maintain temperature, humidity and air circulation in clean rooms that operate around the clock, and even brief outages can lead to yield losses and damage to equipment and data.

“As long as the power grid is built as planned, securing power generation sources should not pose a major long-term problem,” said Ahn Ki-hyun, the director of the Korea Semiconductor Industry Association.

Members of a nationwide civic group opposing the Yongin semiconductor national industrial complex and the construction of ultrahigh-voltage transmission towers hold a news conference in front of the Blue House in Jongno District, central Seoul, on Jan. 20, calling on the government to fully reconsider the project and related power lines. [NEWS1]

Water supply infrastructure for the complex is also progressing. Advanced semiconductor processes require ultrapure water, as even trace impurities can affect production. The Ministry of Climate, Energy and Environment plans to invest 2.21 trillion won ($1.5 billion) to build water supply facilities with a capacity of 1.072 million cubic meters (283 million liquid gallons).

Political uncertainty remains a factor. On Dec. 26, 2025, Climate Minister Kim Sung-whan said the government should consider relocating semiconductor industrial complexes to regions with more abundant electricity, triggering debate over a possible move of the Yongin cluster to the southwestern Jeolla region.

As the controversy grew, President Lee Jae Myung said during a news conference on Wednesday that “it is not easy to overturn matters already decided as government policy” and that “this is not an issue to be judged politically.”

Lee also referred to power and water constraints, saying, “AI industries are energy guzzlers, and they will not remain in places where energy is expensive.” He then predicted that “there will naturally be a shift toward renewable energy,” raising the possibility of voluntary relocations by companies over the longer term.

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.
BY LEE YOUNG-KEUN [[email protected]]