Gyeonggi Province to Focus on Promoting Hynix Factory Expansion

Gyeonggi Province announced on June 6 that it will promote the urgency of factory expansion to the public from multiple angles, in response to remarks made on May 5 by a senior Hynix Semiconductor executive that the company would have no choice but to relocate production lines to China if the factory expansion falls through.

A provincial official said on the day, "Governor Kim Moon-soo and 11 lawmakers from the ruling Grand National Party visited the Icheon Hynix Semiconductor factory on May 5, where a company executive expressed the position that if an investment decision regarding the Icheon factory expansion is not made by the end of this year, the company would have no choice but to go to China. Gyeonggi Province, lawmakers from the region, the provincial assembly, and economic organizations have decided to hold weekly forums and seminars to promote the urgency and justification of the Icheon factory expansion going forward, and will also hold large-scale mass rallies and conduct a province-wide signature campaign involving 10 million residents."

In accordance with this, Grand National Party lawmaker Cha Myung-jin (Bucheon Sosa) plans to hold a public hearing on "Water Quality and Environmental Preservation Act Amendments" in the conference room of the National Assembly Members' Hall on June 7, focusing on raising issues regarding the unreasonableness of the Environmental Ministry's copper restrictions.

Grand National Party lawmaker Lee Kyou-taek (Yeoju and Icheon) plans to strongly criticize the government's decision to deny the Icheon factory expansion through a government interpellation on June 12, and plans to submit four revised bills related to Hynix, including the Water Quality and Environmental Preservation Act and the law regarding industrial complex activation and factory establishment, centered around lawmakers from Gyeonggi Province.

Additionally, the province will hold a constituent meeting of an emergency countermeasures committee for all residents of the province at the Gyeonggi Small and Medium Business Support Center in Suwon on June 9, and will subsequently hold a province-wide rally condemning the rejection of the Icheon factory expansion at locations including Gwanghwamun in Seoul.

Furthermore, starting with a forum related to the Paldang policy at the SME center on June 14, the province plans to hold 3 to 4 additional forums by the end of this month.

In particular, the provincial assembly plans to jointly conduct with the Korea Chamber of Commerce and Industry a 10-million-resident signature campaign visiting all 31 cities and counties, calling for the government to reverse its policy denying the expansion.

Meanwhile, it is known that Hynix actively explained the justification and urgency of the Icheon factory expansion in a closed-door meeting held the previous day with Governor Kim Moon-soo and the ruling party lawmakers.

Based on statements made by Hynix, the Icheon factory is equipped with core functions such as research and development (R&D) facilities and pilot production facilities known as a mother fab, so only the child fab (mass production facility) needs to be expanded. However, if the mother fab is relocated elsewhere, it would take a minimum of three years or more, with an additional cost of 870 billion won.

In particular, as semiconductor processes are expected to shift entirely from existing aluminum to copper processes in the future, if the copper discharge problem at the Icheon factory is not resolved, all existing production facilities covering 236,000 pyeong would become useless, leaving the company with no choice but to close the factory.

If the company relocates the factory through complete closure, it would take three years, and through partial closure, it would take 5 to 10 years, ultimately losing competitiveness. According to the company, in such circumstances, it would have no choice but to relocate all production facilities to China.

The company argues that if the R&D center and mother fab center related to semiconductors are relocated to China, domestic semiconductor technology would be transferred entirely to China, potentially resulting in enormous national losses.