At the "Korea's great leap: three mega projects national briefing" hosted by President Lee Jae-myung on the 29th, he said Samsung Electronics and SK hynix would build semiconductor plants in Honam with an investment of 800 trillion won, but the working-level staff of Samsung Electronics' semiconductor (DS) institutional sector, the actual investor, were left puzzled. Executives who have coordinated capital expenditure plans for the existing Hwaseong campus, as well as Pyeongtaek, Yongin and Taylor, U.S., showed clear signs of dismay at the sudden new variable.
On the 30th, Samsung Electronics' DS institutional sector said publicly about the government's announcement, "We have not yet finalized any specific plans, so there is nothing further to share." Internally, however, it noted that confusion is growing over the large-scale investment plan announced without concrete consultations. A senior official well-versed in Samsung Electronics said, "Wouldn't we first need to set the broad framework and then draw up and consider investment and operation plans?" adding, "Because this is not an investment directly intended by (Samsung), it will take time."
Some are saying "what we feared most has happened." In fact, since January this year, Samsung Electronics has been cautious about the push for Honam semiconductor investment, which had been building mainly in political circles and local governments. Another Samsung semiconductor official said, "Since the first quarter of this year, concerns were raised about external calls for Samsung's semiconductor unit to build a plant in Honam, but we did not expect it to lead to an announcement of such a large-scale investment."
The reason Samsung Electronics' DS institutional sector is in disarray is that there are already key hubs such as Pyeongtaek, Yongin and Taylor, U.S., where capital expenditures are underway. For those investments as well, Samsung Electronics has adjusted timing in line with careful market demand, coordination with clients, process transitions and technology development, workforce, and ecosystem building. Given the nature of the semiconductor manufacturing business, investing without taking such factors into account is highly likely to result in large losses.
Above all, the most worrisome point is the allocation of human and equipment resources across Samsung Electronics' core hubs. First, the Yongin national semiconductor industrial complex has seen the public-private-government consultative body stalled for seven months, and even land compensation has not been completed. The Pyeongtaek campus is slated for additional line expansions, and Hwaseong also functions as a core hub for research and development (R&D) and production technology personnel. With Honam added as a new variable, limited capital expenditures and key personnel would have to be split across three or more hubs.
With the national briefing locking in an investment scale nearing 800 trillion won and specifying a front-end fab, the burden on working-level staff has grown heavier. According to the government announcement, Honam will host front-end fabs, while packaging (back-end) plants will be built in Cheonan and Onyang, South Chungcheong. Wafers made in Gwangju would have to be moved to the Gyeonggi–Chungcheong region for back-end processing. Logistics inefficiency is inevitable, and the distance to Incheon Airport will also be a factor when shipping finished goods to overseas clients.
The presidential office said the move is about pulling forward existing plans as memory demand is rising steeply. In fact, the government argues that SK hynix's fourth fab completion target should be brought forward from 2044 to 2034, and Samsung Electronics' 2048 plan should also be advanced by about a decade to 2034–35. But the industry counters that the memory supercycle is not permanent. Since it takes seven to eight years just to build a fab, if the outlook for a post-2027 "peak-out" materializes, there are concerns that market demand itself could be different by the time the Honam plant goes into full operation.
Industry watchers say the investment could saddle Samsung Electronics and SK hynix with significant financial burdens and act as sandbags on their flexibility in technology transitions. An industry official said, "Even now, it is hard to find people willing to relocate to Yongin or Pyeongtaek, and on top of that we would have to distribute personnel to Honam. If the memory cycle enters an oversupply phase, companies would also have to shoulder massive losses—there are simply too many risk factors."