Conglomerates shoulder Korea’s biggest project since Dangun

Song Ho-keun

The author is a columnist at the JoongAng Ilbo, a chair professor and director of Doheon Academy, Hallym University.

Near the southern tip of Korea in South Jeolla lies Suncheon, a city of fog. Toward the Seomjin River stands the steel mill that Chinese statesman Deng Xiaoping wanted to copy. This is Posco's Gwangyang Steel Works, where workers keep alive Korea’s status as a steel powerhouse. Yet on weekends, there are few places to go, and nights in dormitories can be lonely.

Many have given up on alumni gatherings in Seoul. Company settlement programs are popular. Friends who found spouses through group dating events are envied, but once children arrive, the big city dream returns. Posco has operated schools from kindergarten to university in Gwangyang, Pohang and Incheon, barely keeping young people from flocking to the capital region.

The national briefing on the “three megaprojects” at the Blue House on June 29 was moving. Would it be excessive to say it stirred the heart like the Park Chung Hee era? Without the heavy and chemical industry policy of 1972, Korea might now be weak. The projects are a 21st-century version of that drive: a nationwide triangle of semiconductors, AI data centers and physical AI to make Korea an AI powerhouse. The funding scale was unprecedented: 4.7 quadrillion won ($3.07 trillion), the largest undertaking since the founding of the first Korean kingdom under Dangun.

Emotion soon gave way to questions. Why did Samsung Electronics and SK hynix so readily take on such a vast project? Do the Yongin and Pyeongtaek in Gyeonggi clusters now under construction fall short of future demand? At a briefing in Gwangju the next day, President Lee Jae Myung stressed that the companies made their own decisions. There was no “coercion,” only “guidance and incentives.” In Asan, South Chungcheong, he recalled Samsung founder Lee Byung-chull’s 1983 decision to enter the semiconductor sector. However gently a president asks, it is hard to refuse. Could this become overinvestment?

In the Park era, the method was “coercive inducement,” and conditions were different. The government designated bases for six industries — shipbuilding, automobiles, semiconductors, petrochemicals, steel and nonmetal materials — and assigned them to conglomerate chiefs. Land, power, water, construction and disputes were handled by the police, military, intelligence officials and local governments. Low-interest World Bank loans served as seed money. Hyundai founder Chung Ju-yung won a shipyard loan from Britain’s Barclays Bank by showing a banknote bearing the turtle ship. Young workers were everywhere.

It might have been more reassuring if the president had called this “coercive inducement.” That would have meant shared responsibility. There, he bowed to Samsung Electronics Executive Chairman Lee Jae-yong and SK Group Chairman Chey Tae-won and hailed them as national heroes. His “thank you” sounded like gratitude for taking on the nation's problems. At the southwest briefing, the president called it “historical compensation” for the region, the reward for enduring discrimination and defending democracy. Conglomerates from Daegu, Samsung’s roots, and Suwon, SK’s base, repaid the country on behalf of the administration.

The southwest may have advantages in securing land, but is it truly prepared? What about Jinju, South Gyeongsang, where materials and equipment firms will settle, or Cheonan, Cheongju and Asan in the Chungcheong regions, where packaging facilities will be built? No land is ready by itself. Water, electricity, people and living conditions create prepared land. No company can solve all that unless the government takes charge.

Even if the president creates a direct committee, it is unclear whether ministries, regional governments, the Korea Electric Power Corporation and the Korea Water Resources Corporation will move quickly. Officials have spent 20 years learning how to avoid legal risk. Samsung took 10 years to build its Pyeongtaek fab and SK hynix spent six years preparing Yongin. The Yongin cluster secured power by boring a tunnel from Gonjiam, Gyeonggi. That is worlds apart from Micron’s speed in the United States, where securing water, power, talent and land was the state government’s job.

The three mega projects are national projects. If the administration enjoys political gains while officials relish in regulation in the largest undertaking since Dangun, funded by conglomerates, everyone will fail together. Korea seeks to build a “silicon nation” to rival Silicon Valley. A historic task that could determine Korea’s fate has set sail. May Dangun watch over it.