Mega projects need more than investment pledges

Samsung Electronics Executive Chairman Lee Jae-yong and SK Group Chairman Chey Tae-won on Monday unveiled investment plans worth a combined 2 quadrillion won (about $1.3 trillion) over the next decade at the Blue House's National Briefing on Three Mega Projects. Samsung proposed Gwangju as a candidate site for a next-generation semiconductor complex, while SK hynix announced plans to invest 1.1 quadrillion won in expanding the semiconductor supply chain, including a new 400 trillion won cluster in Korea's southwest. The proposal also envisions an "AI triangle" linking the Honam region with semiconductors, the Chungcheong region with AI data centers and advanced packaging and the Yeongnam region with physical AI and robotics.

The announcement itself, however, is only the beginning. The real challenge is execution.

The semiconductor industry is driven not by balanced regional development but by competitive locations. Industry leaders often cite four essential conditions for investment: reliable electricity, sufficient industrial water, available land and skilled workers. Without these, even the largest investment commitments remain little more than blueprints. The proposed Honam cluster alone will require enormous water supplies and a highly stable electricity grid. Semiconductor fabs operate around the clock and cannot tolerate even momentary power disruptions. Expanding renewable energy alone will not be enough. A reliable power system, including nuclear energy, must also be part of the equation.

Grand visions alone cannot deliver results. Even the Yongin semiconductor cluster, which the government announced it would accelerate by as much as 12 years, has struggled with permitting delays and regulatory obstacles. Similar problems must not be repeated. Because these projects will take years to complete, their success depends on policy consistency. If every change of administration brings a new policy direction, companies will find it difficult to sustain long-term investments.

The government must also address growing political controversy. It bears responsibility for dispelling concerns that site selection was driven more by regional balance than industrial competitiveness. Unless those doubts are resolved, implementation could become increasingly difficult. Both business leaders appeared to underscore that point. Lee described Gwangju only as a "candidate site" benefiting from expected infrastructure and incentives, while Chey said new facilities would be built only where all necessary conditions are met. Neither committed to a specific investment timetable.

Above all, deregulation, faster permitting and timely infrastructure development are essential. Otherwise, Korea risks repeating Intel's abandoned Magdeburg project in Germany, where investment faltered because of infrastructure and workforce shortages. By contrast, TSMC's Kumamoto plant in Japan has become a model, supported by generous government incentives, efficient administration and close cooperation with local authorities. Beyond announcing ambitious projects, the government must ensure dependable electricity, industrial water, transportation networks, workforce development and regulatory reform through every stage of implementation.