The Korean government is pushing for a large-scale semiconductor cluster consisting of four semiconductor manufacturing plants and production facilities of some 50 parts and equipment companies.
SK Hynix is reportedly considering building a new semiconductor plant in the cluster, where the government plans to invest a total of 120 trillion won over the next 10 years.
The government’s plan was included in the business plan of the Ministry of Trade, Industry and Energy for 2019, which was disclosed on Dec. 18. "We will lay out a concrete business plan next year and follow an administrative procedure to implement it," said an official of the ministry.
According to the plan, SK Hynix will invest 1.6 trillion won next year in selecting the plant site and laying the groundwork for the plant.
One potential candidate site being reviewed by SK Hynix is Yongin, Gyeonggi Province, which is close to Samsung Electronics’ semiconductor complex in Giheung, also Gyeonggi Province.
"We have not confirmed Yongin as the home for the industrial complex yet," an SK Hynix official said. "We are continuing to discuss it with the government as there are no more sites available in Icheon and Cheongju."
If SK Hynix decides to build a manufacturing plant in the cluster, it can reinforce its semiconductor ecosystem as semiconductor parts and equipment suppliers will operate next to its new factory.
Considering the fact that it takes about five years to build a semiconductor plant, SK Hynix's new plant will take shape after 2025. This is because in general, it takes a total of 10 years to build industrial complex infrastructure.
SK Hynix is operating plants in Icheon and Cheongju in Korea. Recently, Cheongju M15 Plant was completed and the chipmaker holds a ceremony on Dec. 19 to begin construction of M16 Plant in Icheon. But there is no place to build a new plant in the two areas.
In contrast, Samsung Electronics can build four more semiconductor plants in Pyeongtaek, Gyeonggi Province as it has secured a 2.89 million-square-meter site
The government’s push for deregulation encouraged SK Hynix to participate in the government’s semiconductor cluster plan. In order to build a semiconductor factory in the Seoul metropolitan area, SK Hynix had to conform to regulations such as the Seoul Metropolitan Area Maintenance Planning Act. "It took SK Hynix 10 years from applying for the expansion of M14 Plant in Icheon to the completion of the plant due to various regulations," said a company official.
"We have expectations for the cluster to be created by the government and the private sector," an industry analyst said.