South Korea has set an ambitious goal of establishing a major new semiconductor hub in its southwestern region within the next four years, but fierce local opposition to the project’s enormous demands for power and water could prove to be among its greatest challenges.
Known as the Honam semiconductor industrial complex, the project carries an estimated price tag of at least 800 trillion won — roughly $540 billion — and sits at the center of President Lee Jae Myung’s effort to extend the economic benefits of the AI chip industry beyond the thriving Seoul metropolitan area.
Companies participating in the project, including Samsung Electronics, will need to identify new energy sources to keep the complex running, with the target of having it operational before Lee’s presidential term concludes in 2030.
Analysts estimate that electricity demand from the four planned chip fabrication facilities alone could account for 70% to 80% of the total annual power consumption currently used across the southwestern regions of Gwangju, North Jeolla, and South Jeolla.
Residents in the area told Reuters they are opposed to plans for new transmission lines or nuclear reactors, pointing to what they describe as failures in past and present energy infrastructure that they say was put in place without their input.
Those same residents say they were also left out of discussions about a proposal to raise an existing dam to supply water to the project.
Neal Won, a principal analyst at S&P Global Energy, described the situation plainly: “A huge amount of new power demand is coming into a region that previously had little, and that’s the core of the problem.”
Experts caution that without significant and rapid expansion of infrastructure, getting the complex running at full capacity by 2030 will be a steep challenge.
South Korea’s energy ministry pushed back on some of those concerns, noting that the southwest already produces more electricity than local residents currently use. Officials argued that if chip fabrication plants are built there, much of the required power could be generated within the region itself, reducing the need for lengthy new transmission lines. The ministry added it would coordinate closely with local governments to build out power infrastructure before the facilities begin operations, and would look at burying power lines underground in densely populated areas where feasible.
Energy Minister Kim Sung-whan has also indicated that building new nuclear reactors, including small modular reactors, may be on the table.
WARNINGS FROM NEARBY PROJECTS
Chip cluster developments in Yongin, a city near Seoul, offer cautionary examples of how these obstacles can slow progress. Both Samsung Electronics and SK Hynix have been expanding chip manufacturing capacity there, but both have run into delays tied to power and water supply problems.
Yongin’s mayor, Lee Sang-il, noted that SK Hynix’s first fabrication plants in the city — initially announced back in 2019 — were designed to receive 265,000 metric tons of water daily from a weir located in another city, but opposition from residents in that area held up the process for months. He warned that similar objections could arise for water and power supplies coming from other regions. “The responsibility to calm opposing voices and resolve differences lies with the central government,” he said.
The government has stated it intends to help both Samsung and SK Hynix accelerate construction at the Yongin site.
In Yeonggwang county in the southwest, a farmer and co-chair of a local anti-nuclear coalition named Roh Byeong-nam said residents there are prepared to take legal action if any nuclear reactor expansions or extensions move forward. “To now talk about new construction, on top of extending the lifespan of ageing reactors, is nothing less than a declaration that Yeonggwang will become a nuclear testing ground and eventually a permanent nuclear waste site,” Roh said.
WATER SUPPLY EQUALLY COMPLICATED
The water supply situation presents its own set of complications. According to the environment ministry, the semiconductor cluster would require approximately 650,000 metric tons of water each day — a volume that exceeds the entire daily residential water usage of Gwangju.
Project developers are hoping to avoid building a large new dam by combining the use of reclaimed water with five existing dam systems. One part of that plan involves raising Dongbok Dam to secure an additional 250,000 metric tons of water per day.
Kim Kwang-jin, who leads a residents’ group near Dongbok Dam, said the community wants to be part of the conversation. “This is the same as dam construction,” Kim said, estimating that between 1,500 and 1,600 households could be directly or indirectly affected. “They announced it unilaterally without considering resident acceptance.”
The energy ministry responded by saying that raising the existing dam would cause less environmental disruption and require fewer relocations than building an entirely new dam. Officials said they will continue discussions with Gwangju and nearby residents to prevent opposition or infrastructure problems from derailing the project’s timeline.
