Three hurdles loom over the plan to bring chip plants to regions outside of Seoul

Plans by Samsung Electronics and SK hynix to build semiconductor plants in the Jeolla region have turned into a symbol of the government’s drive for balanced national development. But concerns are mounting, as the projects must overcome three daunting hurdles: securing talent, winning residents’ consent and building supporting infrastructure.

People are the primary obstacle. Engineers who have built their lives in the greater metropolitan area are wary of being uprooted — maybe forcibly — to a distant province.

“I bought a home in Seoul ahead of my wedding, so being told out of the blue to move to some far-off province would be a serious problem,” said a fifth-year engineer in Samsung Electronics’ chip division, adding that it is “not easy” for workers whose companies expect them to “follow a plant.”

“My whole life is based here, and I’m afraid that I could be forced to relocate."

A popular saying among engineers acts almost as a rule: “The southern limit for employment is Pyeongtaek, and the southern limit for research and development is Pangyo.” Pyeongtaek and Pangyo are some 60 kilometers (37.3 miles) and 25 kilometers, respectively, south of Seoul. 

For regions farther than those points, hiring becomes next to impossible, however generous the terms.

“Companies relocated to the greater Seoul area to recruit outstanding young people, concentrating [employment] to that region,” the Ministry of Finance and Economy said in a 2026 economic growth strategy report released in January.

These psychological barriers surrounding a Seoul exodus have fueled calls for other regions to establish schools, hospitals and cultural venues, all of which large work forces need to settle.

“Forcibly reassigning core talent risks pushing them to quit, and that is the dilemma,” one industry source said.

“We need to expand semiconductor contract programs tied to leading [non-Seoul] regional universities and build a cycle of nurturing local talent who will put down roots there,” Lee Jong-hwan, a professor of system semiconductor engineering at Sangmyung University, said.

The time needed to negotiate with local governments and bring residents on board with projects is another obstacle. With more than 60 trillion won ($38.8 billion) estimated to flow into the construction of a single project, a plant that comes online just as the global chip supercycle dies down could leave the companies buried in fixed costs.

SK hynix’s Yongin semiconductor cluster in Gyeonggi was only able to break ground on its first fab plant in February 2025, roughly six years after the site was selected in February 2019,  due to residents’ concerns over wastewater discharge. Samsung’s Pyeongtaek campus, also in Gyeonggi, took five years to settle locals’ complaints over the construction of transmission lines.

“Areas where plants are built enjoy an increase in the number of jobs and tax revenue, but persuading residents living near transmission lines or wastewater outfalls [to consent to the plant] is a grueling process,” said an industry source who asked not to be named.

On the other hand, Japan moved far faster with TSMC’s plant in Kumamoto, which broke ground in April 2022, just six months after the project was unveiled in October 2021. Sweeping state support on permits and regulations aided the process.

“To land TSMC’s Kumamoto plant, Japan paid drastic subsidies covering 30 to 40 percent of construction costs, and when commuter congestion arose, the government rolled up its sleeves to the point of adjusting civil servants’ start times,” said Jeon Byung-seo, the head of the China Economy and Finance Research Institute (translated).

Power, the lifeline that keeps a fab running, is also a major issue. In Gwangju and South Jeolla, 44.4 percent of total generating capacity — or 7,573 of 17,039 megawatts — comes from weather-dependent solar and wind, according to the Korea Electric Power Corporation’s April monthly statistics.

“A semiconductor plant needs power around the clock, but the amount of renewable energy swings widely, so its limits are clear,” said Yoo Seung-hoon, a professor of future energy convergence at the Seoul National University of Science and Technology.

The government means to close the gap by expanding energy storage, but the professor was skeptical that this would be enough.

“Energy storage systems are expensive and needed in such enormous amounts that building them alone would cost trillions of won,” Yoo said.

BY KIM SU-MIN, YI WOO-LIM, LEE YOUNG-KEUN [[email protected]]