SK Group Chairman Lee Jae-yong Considers Domestic and International Locations for Next Semiconductor Plant
SK Group Chairman Lee Jae-yong has announced that the company is evaluating both South Korean and international locations for its next semiconductor production facility, citing rising demand driven by the AI boom, according to a statement released on October 10, 2023. The decision comes as SK Group accelerates plans for its Yeoju Semiconductor Cluster, a $20 billion project set to begin operations in early 2024.
Infrastructure and Market Considerations Guide Location Strategy
Lee emphasized that the new facility would prioritize regions with robust infrastructure, including power supply, land availability, workforce, and water resources. “If South Korea cannot accommodate it, we will consider overseas options,” Lee stated during a press conference following his appearance at the Nikkei Forum in Tokyo on October 9. “We aim to balance the needs of our customers and global stakeholders.”
The remarks align with broader industry trends, as major semiconductor manufacturers like TSMC and Samsung have expanded production in the U.S. and Asia to meet demand from American tech giants. SK Group’s focus on infrastructure reflects the industry’s reliance on stable, high-quality resources for advanced manufacturing processes.
South-Korea-Japan Economic Cooperation Highlighted
Lee also reiterated SK Group’s commitment to strengthening economic ties with Japan, calling for a collaborative platform involving governments and private sectors. “We are prepared to invest in areas where cooperation is feasible,” he said, citing SK’s 2017 acquisition of a stake in Japanese NAND flash manufacturer Kioxia. While no immediate divestment plans were announced, Lee noted the company is exploring strategies to grow alongside regions that generate returns.
This stance follows recent diplomatic efforts between South Korea and Japan to address trade disputes and enhance technological collaboration. A separate report by the Korea Trade Insurance Corporation highlighted a 15% increase in South Korean investments in Japan between 2022 and 2023, signaling improved bilateral relations.
Context of Domestic Investment Pressure
The announcement coincides with South Korean President Yoon Suk-yeol’s push for regional economic development, including a planned meeting with major conglomerate leaders in late October. Samsung Electronics and SK Hynix have both faced scrutiny over their concentration of facilities in Seoul and Gyeonggi Province, with the government urging greater investment in underdeveloped regions.
SK Group’s Yeoju project, located in Gyeonggi Province, is expected to create over 10,000 jobs and boost local infrastructure. However, Lee’s comments suggest the company is preparing for scenarios where domestic constraints—such as land availability or regulatory hurdles—might necessitate international expansion.
As the semiconductor industry navigates geopolitical shifts and supply chain diversification, SK Group’s dual focus on domestic growth and global flexibility underscores the challenges facing multinational tech firms in an increasingly fragmented market.