Lee defends chip cluster initiative in southwest as opposition goes on the attack
A proposed semiconductor cluster built on the back of major investment by Samsung Electronics and SK hynix has become a flashpoint over corporate pressure, regional policy and presidential office objectives.
President Lee Jae Myung speaks during a meeting held at the Blue House on June 26, central Seoul.YONHAP
A proposed semiconductor cluster in Korea's Honam region — encompassing Gwangju, North Jeolla and South Jeolla —backed by investments from Samsung Electronics and SK hynixhas become the center of an escalating political battle as the opposition accuses the Lee Jae Myung administration of pressuring major corporations into making investment decisions for political gain.
The dispute has expanded beyond industrial policy into a broader confrontation over government intervention in business and the political stakes facing President Lee.
As Lee's approval rating tipped toward negative sentiment for the first time since taking office, the opposition has intensified its attacks. The controversy has also become intertwined with political calculations ahead of the ruling party's national convention on Aug. 17.
The presidential office will hold a public briefing on the government's three megaprojects aimed at balancing regional development at the Yeongbingwan state guest house at the Blue House complex in central Seoul at 2 p.m. on Monday.
The Ministry of Trade, Industry and Resources and the Ministry of Science and ICT are expected to unveil plans for three flagship projects centered on semiconductors, physical AI and data centers.
Samsung Electronics and SK Group are also expected to announce investment plans, including details of the proposed Honam semiconductor cluster. Industry observers estimate the combined investment could exceed 1 quadrillion won ($650.2 billion)
The decisive factor behind selecting Honam was a surge in semiconductor demand, according to presidential officials.
The top office had originally planned to develop an industrial complex in the region compliant with the "renewable electricity 100" corporate initiative on energy sourcing. That plan, however, ran into obstacles as opposition from local residents complicated the government's proposal to transmit renewable electricity from Honam to the Seoul metropolitan area through an energy superhighway.
SK hynix headquarters on April 23.YONHAP
At the same time, AI fever drove a sharp increase in demand for semiconductors in the second half of last year, creating the need for additional production plants.
Samsung Executive Chairman Lee Jae-yong reportedly said during a private meeting with President Lee at the presidential office on Thursday that the company could earn more from semiconductors this year than it has over its entire history and even more next year. The chairman reportedly added that "this is a time when every semiconductor plant we build makes money."
SK Group Chairman Chey Tae-won said on June 2 that the company “plans to double its wafer production capacity within the next five years.”
Honam emerged as the preferred location because the Seoul metropolitan area's semiconductor production capacity is nearing saturation, while the Honam region offers abundant renewable energy, according to presidential officials.
They also cited the planned integration of Gwangju and South Jeolla as a single administrative region as a factor, which is expected to bring 20 trillion won in government funding over four years.
The opposition, however, argues that the decision was politically motivated because the cluster is being built in Honam, a region that has long been a stronghold of the ruling Democratic Party, rather than elsewhere.
“It would not be an exaggeration to say the president and the presidential chief of staff for policy are abusing their power,” Rep. Ahn Cheol-soo of the People Power Party said on Friday.
Independent Rep. Han Dong-hoon also criticized the administration, saying the governmenthad summoned the heads of Samsung and SK to pressure them into building the cluster in Honam.
"How is this any different from companies 'voluntarily' donating money in the Mi-R Foundation and K-Sports Foundation scandal?" Han said, referring to a 2016 corruption scandal in which major corporations were accused of making "voluntary" donations to two nonprofit foundations, allegedly under pressure from the administration of then-President Park Geun-hye and her longtime confidante Choi Soon-sil. The scandal ultimately led to Park's impeachment in 2017.
President Lee Jae Myung speaks during a meeting with his top aides at the Blue House in Seoul on June 25.NEWS1
Viewing the Honam semiconductor cluster as one of the defining policy initiatives of his second year in office, Lee personally defended the project by posting seven separate posts on X over the weekend, each rebutting the criticism.
Responding to Ahn and Han, Lee wrote that the chief executives decided on the investment after concluding it would benefit their companies following persuasion and requests from public officials.
"This is not abuse of power or coercion," Lee wrote. "It is called administrative guidance or facilitative administration."
He also wrote, "A Buddha's eyes see a Buddha, while a pig's eyes see a pig," referring to how people perceive the world according to their own values or mindset.
Lee also rejected media reports claiming the Honam region lacks a sufficient industrial water supply.
"With proper allocation and management of water resources, it would be possible to supply 1 million tons of industrial water per day," Lee wrote.
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.
