Gov't push to make Gwangju chip packaging hub raises eyebrows in Korea's central region

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Gov't push to make Gwangju chip packaging hub raises eyebrows in Korea's central region

Published: 16 Dec. 2025, 16:31 Updated: 12 Feb. 2026, 18:02

Audio report: written by reporters, read by AI

President Lee Jae Myung speaks at the “Vision and Strategy for K-Semiconductors in the AI Era" briefing at the presidential office in Yongsan District, central Seoul on Dec. 10. [JOINT PRESS CORPS]

The government’s push to develop Gwangju into a hub for advanced semiconductor packaging is unsettling companies in the Chungcheong region, where executives say years of government-backed clustering now appear to be shifting south.

An employee at a semiconductor packaging company in North Chungcheong said the plan to build a “southern semiconductor innovation belt” has left the company confused. The initiative would expand an ecosystem long concentrated in the Seoul metropolitan area by assigning advanced packaging to Gwangju, power semiconductors to Busan and materials and components to Gumi, North Gyeongsang.

“An advanced packaging hub is already taking shape in Chungcheong,” the employee said. “Do we now have to move down to Gwangju? I worry whether government support might be cut if we stay in Chungcheong."

Industry confusion has grown as the government increasingly promotes Gwangju as the optimal location for packaging.

At the “Vision and Strategy for K-Semiconductors in the AI Era,” chaired by President Lee Jae Myung on Wednesday, the government said it would establish an advanced semiconductor packaging cluster in Gwangju.

The plan calls for investing 42 billion won ($28.5 million) by 2030 to build an advanced packaging demonstration center, along with an additional 500 billion won to develop Gwangju into a national flagship packaging hub.

Semiconductor packaging involves cutting individual chips from completed wafers and assembling them with various components to create final products.

SK hynix displays a physical sample of its HBM4 at the Semiconductor Exhibition held on Oct. 22 at COEX in Gangnam District, southern Seoul. [NEWS1]

Outsourced semiconductor assembly and test companies, or OSAT firms, typically handle this back-end process. In recent years, advanced packaging has become important as chipmakers seek higher performance by vertically or horizontally stacking and interconnecting multiple chips on silicon interposers.

Industry concern over the government’s announcement stems from what companies see as inconsistencies with earlier policy.

In 2021, under the Moon Jae-in administration, the government unveiled a roughly 510 trillion won semiconductor development strategy known as the “K-Semiconductor Belt.”

The plan envisioned a K-shaped industrial corridor linking Pangyo, Gyeonggi, and Onyang, South Chungcheong, as well as Icheon and Yongin, Gyeonggi, and Cheongju, North Chungcheong. The government also proposed an advanced packaging platform spanning Cheonan, South Chungcheong, Onyang, and Goesan County, North Chungcheong.

The SK hynix building is seen in Icheon, Gyeonggi on Jan. 23. [YONHAP]

At the time, officials said the central region — the Chungcheong area and nearby southern Gyeonggi — offered strong connections between foundry operations and packaging.

Chungcheong already hosts Samsung Electronics’ packaging lines as well as major domestic OSAT firms such as Hana Micron, Nepes and SFA Semicon, while also sitting close to chip fabrication plants in Pyeongtaek, Hwaseong and Yongin, Gyeonggi.

However, the Lee administration has presented a different rationale.

"Gwangju hosts Amkor Technology, a global industry leader, and the construction of AI data centers is expected to generate packaging demand, so the city offers favorable conditions for clustering advanced packaging companies,” the government said on Wednesday.

Amkor Technology, the world’s second-largest OSAT company headquartered in the United States, operates facilities in Songdo and Bupyeong, Incheon, and Gwangju.

Industry insiders, however, question whether Amkor Technology’s Gwangju operations meaningfully strengthen Korea’s domestic packaging capabilities.

“Expanding operations in Gwangju would raise logistics costs and make it harder to secure skilled workers,” one packaging industry official said.

The Lee administration itself pointed to structural limits in the packaging sector. When announcing the K-Semiconductor Belt-related policy, it noted that Korea’s packaging production base consists of both domestic firms and Korean subsidiaries of foreign companies, underscoring the need to strengthen homegrown technological capabilities.

Critics also argue that Gwangju has weaker links to packaging than other cities included in the southern belt.

In 2023, when the government designated Gumi as a semiconductor core materials hub and Busan as a power semiconductor specialization zone under the Act on Special Measures for Strengthening and Protecting the Competitiveness of National High-Tech Strategic Industries and the Act on Special Measures for Strengthening the Competitiveness of Materials, Parts and Equipment Industries, Gwangju received a designation for autonomous driving components, not semiconductors.

“The central region already has a packaging ecosystem led by large companies, so we plan to support the establishment of OSAT-focused firms in Gwangju,” an official from the Ministry of Trade, Industry and Energy said. “The aim is to maintain the existing ecosystem while fostering an additional packaging hub in Gwangju as part of balanced regional development."

A Gwangju city official said the city plans to "actively promote training programs for packaging specialists" by linking local universities, including Chosun University and the Gwangju Institute of Science and Technology, with existing work force development initiatives.

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 GA-RAM [[email protected]]