Three mega projects that achieved the first ‘departure from the Gyeongbu axis’ in industrial policy··· there is also criticism that “data centers have questionable employment effects” - 경향신문

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President Lee Jae Myung on the 29th joins hands with SK Group Chairman Choi Tae-won and Samsung Electronics Chairman Lee Jae-yong at the ‘National Briefing on the Republic of Korea’s Grand Leap: Three Mega Projects’ held at the Blue House. Blue House Photo Journalists Corps

With the announcement of the ‘three mega projects’ that disperse semiconductor process hubs to Chungcheong and Yeongnam, including establishing a ‘semiconductor production base’ in Honam, observers say it is a meaningful attempt in that the axis of industrial policy has moved away from the ‘Gyeongbu axis’. However, it will take a long time for visible effects to emerge, and in the case of AI data centers, job creation effects are small while noise and other issues arise, prompting questions about whether this truly serves balanced national development.

For now, regional industrial policy experts on the 30th assessed that it is meaningful that the policy for industrial hubs has shifted direction from Yeongnam to Honam.

Dividing semiconductor processes so that Honam focuses on manufacturing, Chungcheong on packaging and other back-end processes, and Yeongnam on materials, parts, and equipment has long been floated as an idea in terms of balanced development. Legislative investigators Yoo Jae-guk, Kim Jin-su, and Park Jae-young of the National Assembly Legislative Research Service wrote in an issue analysis report released in April, “Rather than concentrating all lines (of semiconductor processes) in the Seoul metropolitan area, if regionally based hubs with existing infrastructure are organically linked, effects of both ‘easing concentration in the metropolitan area’ and ‘inflow of manufacturing personnel into the regions’ can be achieved at the same time.”

In other words, a ‘networked ecosystem’ for the semiconductor industry is needed to overcome costs and uncertainties that arise when power and water supplies are drawn from outside the metropolitan area while concentrating processes within it, and to establish a foundation for attracting talent to non-metropolitan areas, which has been cited as a key task in discussions on balanced development.

In particular, the fact that the largest amount, 800 trillion won, is to be invested in the Honam manufacturing hub is receiving forward-looking evaluations.

Yang Seung-hoon, a sociology professor at Gyeongnam National University who studies heavy-industry regions such as Geoje and Ulsan, said, “Since the heavy and chemical industrialization of the 1970s, it is meaningful that an industrial policy with an investment scale this large has been presented, and at the same time its largest investment destination has moved beyond the Gyeongbu axis.” He added that east-west links are being strengthened, such as the construction of the GwangjuDaegu Dalbit Railway and the push to build a BusanMokpo high-speed rail (KTX), saying, “I believe the industrial infrastructure can operate without strain even if hubs are dispersed across regions.”

The problem is that although the government is emphasizing a speed drive that shortens the period to create industrial complexes from ten years to five, in reality it will take time before effects of balanced development, such as plant operations, can be felt.

The government announced that if a ‘fast track’ is introduced, such as exempting preliminary feasibility studies and proceeding with permits, compensation, and design simultaneously, it would be possible to get plants operating in about five years instead of the existing ten.

On the 29th, the construction site of the Yongin Semiconductor Cluster General Industrial Complex in Wonsam-myeon, Cheoin-gu, Yongin, Gyeonggi Province. Kwon Do-hyun Reporter

However, although the government announced the creation plan for the Yongin Semiconductor Cluster in 2023 and mobilized tools such as exemption from the preliminary feasibility study, it still took one year and nine months just to obtain approval for the industrial complex plan. Land preparation is expected to be completed only in 2031, eight years after the plan was announced. Given that plant construction and operation come after that, the prevailing view is that the government target is unrealistic.

Some also forecast that, unlike attracting companies, it will not be easy to expect core personnel to settle in the regions. Lee Eun-hyung, a research fellow at the Korea Construction Policy Research Institute, said, “Yongin at least has features like large hospitals and education infrastructure, similar to a new town, but it will not be easy for other regions to secure infrastructure of that caliber,” adding, “As seen in the Daejeon Daedeok Research Complex, many commute from Seoul and the metropolitan area, so the tendency of key research and development personnel to avoid relocating outside the metropolitan area is unlikely to change.”

Fundamental doubts are also being raised as to whether building AI data centers in Ulsan, Donghae, Sejong, and other places aligns with balanced development. AI data centers are likely to trigger local issues due to various environmental problems, yet their job creation effects are not large. Indeed, for this reason, data centers are not being built in some U.S. localities.

Lee Heon-seok, a policy committee member at Energy Justice Action, said, “In the United States, broad-based opposition movements have arisen as data centers consume large amounts of power and water and generate vibration and noise, and some local governments are even moving to enact ordinances that say ‘do not build them in our area’,” adding, “Nevertheless, unlike manufacturing, they do not generate employment of several thousand to tens of thousands, and end up hiring only about 100 to 200 people for facility maintenance and management.”