Japan's Miyagi Prefecture has proposed a site of approximately 300,000 square meters to SK Hynix as a candidate for a semiconductor factory, engaging in behind-the-scenes efforts to attract the company. This comes as the South Korean government expresses caution over the potential overseas leakage of advanced semiconductor technology. Attention is focused on the ongoing Korea-Japan Chamber of Commerce meeting in Sendai, where Chey Tae-won, chairman of SK Group, is in attendance.
According to the Nihon Keizai Shimbun (Nikkei) on August 31, Miyagi Prefecture has presented specific candidate sites to SK Hynix, including a 300,000 square meter area in the Second Sendai Northern Core Industrial Complex in Ohiramu Village, near Sendai. This site is equipped with the necessary water and power infrastructure for a semiconductor factory.
The Korea-Japan Chamber of Commerce is holding a meeting in Sendai focused on AI and semiconductors. Although this is a regular event, local interest is heightened due to Chey Tae-won's presence. Yoshihiro Murai, the governor of Miyagi Prefecture, mentioned the possibility of meeting with Chey during a press conference on August 26.
Earlier, on August 21, a domestic media outlet reported that SK Hynix is considering building a memory semiconductor factory in Miyagi Prefecture. However, SK Hynix denied that any decisions had been made, stating that it is exploring various options.
Miyagi Prefecture has also officially distanced itself from the reports. Governor Murai stated during the August 26 press conference, "We do not know anything officially as Miyagi Prefecture," adding, "This is not a situation I can specifically comment on." He also claimed to be unaware of the August 21 report. However, he acknowledged that he is in contact with semiconductor manufacturers and material companies, stating, "It is a matter between the companies and the prefecture, so we cannot disclose information. The same goes for SK Hynix."
Speculation about SK Hynix's expansion into Japan has surfaced multiple times, with Kanto, Hokkaido, and Kyushu also mentioned as potential sites. Local governments are eager to attract such significant investments, which could lead to job creation.
The backdrop for discussions about SK Hynix's potential factory in Japan is the increasing demand for memory due to the rise of AI. The rapid growth of AI data centers has created an urgent need for expansion. Chey Tae-won has predicted that the shortage of memory semiconductors will continue until 2030. Establishing a production base in Japan would also allow SK Hynix to connect with globally competitive Japanese semiconductor equipment and material companies.
The concentration of production facilities in South Korea is another factor driving the consideration of a Japanese expansion. This would help mitigate risks associated with production disruptions due to potential conflicts on the Korean Peninsula or natural disasters. In a June interview with Nikkei, Chey stated, "Japan has a well-established semiconductor ecosystem, making it a strong candidate location."
Nikkei identified the approval issue from the South Korean government as a major variable in the construction of SK Hynix's factory in Japan. South Korea designates semiconductors as a national strategic industry, and advanced semiconductor-related technologies are managed as 'core national technologies.' Establishing production facilities overseas using these technologies requires government review.
The stringent review process is primarily due to concerns over technology leakage. The semiconductor industry generally views that obtaining government approval for overseas production of cutting-edge AI products is unlikely, according to Nikkei. Even if SK Hynix pushes for a factory in Japan, the key variable will be what level of products and processes can be produced overseas.
Additionally, pressure from the U.S. government regarding investments adds to the burden. While the South Korean government is cautious about overseas production of advanced semiconductors, the U.S. government is openly demanding increased local production. U.S. Secretary of Commerce Gina Raimondo stated in July at a groundbreaking ceremony for Micron's facility in Clay, New York, that she wants to bring Samsung and SK Hynix to the U.S. to build production facilities, as reported by Bloomberg. While discussing the expansion of investments by both companies in the U.S., she did not disclose specific details. She emphasized that "Micron is leading the way in U.S. investments, and competitors will inevitably follow suit," adding that "President Trump made it clear that businesses should operate in the U.S."
Amid this, SK Hynix has already broken ground on its U.S. investment. On August 27, the company held a groundbreaking ceremony for a semiconductor packaging plant in Indiana. The investment is approximately $4 billion, expected to create over 7,000 jobs in collaboration with more than 100 local companies. The ceremony was attended by numerous officials from the U.S. government and local authorities. SK Hynix emphasized that this plant will "open a new future for Korea-U.S. AI cooperation." However, it is important to note that this facility is an assembly and packaging plant, differing from the memory production plant being discussed in Japan.
As the need for SK Hynix to expand its overseas production bases grows, the complexities of interests among Korea, the U.S., and Japan regarding the location of new plants are becoming apparent. Additionally, the volatility of the memory semiconductor market and the sustainability of AI demand supporting SK Hynix's expansion plans remain variables. Nikkei suggests that the efforts to attract SK Hynix to Miyagi Prefecture may face challenges, with comments within the Miyagi Prefectural Office indicating that "semiconductors have already become an international issue, and the future is uncertain."
* This article has been translated by AI.
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