The South Korean government is accelerating its push for three major mega projects, including semiconductor and physical artificial intelligence initiatives. However, industry leaders are voicing urgent concerns about the need for infrastructure to translate large-scale investment plans into actual construction and production. While hundreds of trillions of won are earmarked for investment, challenges such as securing power, water, land, permits, and workforce management remain unresolved.
The government's commitment to dismantling bureaucratic barriers and regulations has drawn attention to how effectively these key support measures will be reflected in actual policy.
According to industry sources, the semiconductor sector is emphasizing the need for a "stable supply of power and water" as a prerequisite for the mega projects. Advanced semiconductor fabrication plants require substantial electricity and large quantities of ultra-pure water during production. If power transmission networks, substations, and water supply facilities are not established in a timely manner, the completion and operational readiness of these fabs could be delayed.
Jong-Hyun Jeon, Vice Chairman of Samsung Electronics' Device Solutions Division, recently stated at a government event, "Power and water are the most critical industrial infrastructures in the AI era," urging for stable national supply and competitive pricing. He also called for measures such as expanding nuclear power, activating power purchase agreements (PPAs), and implementing liquefied natural gas (LNG) combined heat and power generation for reliable electricity supply. Similarly, Noh-Jung Kwak, CEO of SK Hynix, stressed the importance of securing large sites and stable power and water infrastructure, along with timing, for constructing semiconductor production fabs.
Swift permitting and land acquisition are also critical challenges. Industry insiders express concerns that issues related to community acceptance and permitting for power transmission and water supply facilities could prolong the timeline for fab construction.
In particular, the Honam region, which needs to establish new industrial bases, must simultaneously advance the relocation of military airport functions, land transfer, national industrial complex development plans, various permits, and infrastructure construction alongside fab creation. There are concerns that following existing procedures sequentially could delay the government's targeted investment schedule.
Talent acquisition and improving living conditions are also highlighted as challenges. Semiconductor plants require thousands of research and development personnel, as well as workers from materials, components, and equipment suppliers. Without adequate education, housing, and transportation infrastructure, building regional clusters will face limitations.
Recently, the issue of regulatory exceptions for the 52-hour workweek has also come to the forefront. Disagreements among relevant ministries have emerged regarding including exceptions for semiconductor R&D personnel in the mega zone law. The industry argues that as China rapidly closes the technology gap in memory through aggressive investment and workforce deployment, improvements in regulations, including the management of R&D personnel, must accompany infrastructure development.
In response to these industry demands, the government has promised comprehensive support. President Lee Jae-myung emphasized during the second joint public-private mega project review meeting that "a thorough review is necessary to ensure that issues such as bureaucratic barriers, regulations, and infrastructure shortages do not dampen corporate investment intentions or delay procedures," adding that "at this stage, securing land and infrastructure is of utmost importance." Previously, President Lee had also stated his commitment to providing one-stop administrative support and personally overseeing power and water issues.
An industry representative remarked, "Large-scale advanced industrial investments cannot proceed at speed based solely on corporate decisions. It is crucial that power, water, land, permits, and workforce are prepared simultaneously, and how quickly the government can reconcile the interests of various ministries to shorten the actual project timeline will be key."
* This article has been translated by AI.
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