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| Seen is SK hynix's M14 chip-manufacturing facility in Icheon, Gyeonggi Province. / Courtesy of SK hynix |
By Jun Ji-hye
SK hynix has officially proposed Yongin in Gyeonggi Province as a location for the semiconductor cluster that will be created under the government-backed 120 trillion won ($106 billion) project, the company said Thursday.
"A special purpose company (SPC) submitted a letter of investment intent to the Yongin City Government, Wednesday," an official from the world's second-largest memory chip maker said.
The SPC, consisting of SK Engineering & Construction and financial investors, was created to form a site for the SK hynix-led semiconductor cluster. The SPC submitted the letter after consultation with the chipmaker.
The submission of the letter was construed as SK hynix officially asking the government to select Yongin as the chip cluster site, as the letter will be submitted by the Yongin City Government to the relevant ministries, including the Ministry of Economy and Finance and the Ministry of Trade, Industry and Energy.
According to the finance ministry, the government plans to make a final decision on the location by the end of next month.
In December, the trade ministry announced a plan for the project to create a semiconductor cluster in an effort to create synergy in the semiconductor industry that has been hit by weaker global demand and a drop in sales prices.
"Once the site is confirmed, SK hynix plans to invest 120 trillion won to build four semiconductor fabrication plants there after 2022 when the site building work is expected to be completed," the company official said. "In addition, more than 50 subcontractors within and outside the country will move into the cluster, which will create synergy in enhancing a semiconductor ecosystem."
Several municipalities have engaged in heated competition to host the semiconductor cluster as the project will create thousands of new jobs and generate hundreds of billions of won in new tax revenues.
Those participating in the race included Icheon in Gyeonggi Province, Cheongju in North Chungcheong Province, Cheonan in South Chungcheong Province and Gumi in North Gyeongsang Province as well as Yongin.
Industry officials said SK hynix may have placed emphasis on the geographical advantage of Yongin as the region is near Seoul, which will make it easier to attract excellent personnel and establish necessary infrastructure such as electricity, water and roads.
The region is also close to the chipmaker's headquarters in Icheon.
"About 85 percent of the member companies of the Korea Semiconductor Industry Association are in Seoul or Gyeonggi Province," an industry official said. "If the semiconductor cluster is created in Yongin, companies will be able to organically cooperate in real time."
