S. Korea Expecting Huge Impact from Samsung Electronics’ Semiconductor Facility in Pyeongtaek

Godeok Industrial Complex, which is located in Pyeongtaek and is about 80km away from Seoul, has many concrete-carrying trucks arriving and leaving due to construction of Samsung Electronics’ semiconductor facility. Surrounding area looked gray and foggy due to sand and dust.

Construction started in May of last year. Framework process has entered its final stage and facility has started to take their forms. Construction will finish by end of this year and actual operation will start after installing clean rooms and bringing in equipment in early next year.

Smoking areas that are around parking lots, which were covered in dust, remained closed. Doors to smoking areas are opened at certain times such as lunch time (between 12 P.M. and 1 P.M.) and others. Because a sign indicates that these doors are also open between 12 A.M. and 1 A.M., one can see that graveyard shifts are also taking place quite often. There were many banners that advertised about renting short-term studios and hiring employees along with forklifts and cranes around the construction site. There was also a banner that advertised about educating basic safety and health because employees could only work at this construction site after they receive this training. Many number of employments were created just from this construction that is taking place for one and half years.

“Although economic impact is limited in this region, national level of creation of employments and economic impacts will take place after actual operations start taking place at this facility.” said a representative for Samsung Electronics.

Samsung Electronics is using total of 2.83 million m2 to build its semiconductor facility. Compared to hwaseong workplace (about 1.59 million m2), which is currently the biggest workplace out of Samsung Electronics’ semiconductor workplaces, it is about 2 times bigger. Samsung Electronics is going to first use 790,000 m2 to construct infrastructure facilities and a high-tech semiconductor line and is going to invest $13.5 billion (15.6 trillion KRW) for first phase of construction. Samsung Electronics is expecting a huge economic impact such as induction of production of $35.5 billion (41 trillion KRW) and creation of employments for 150,000. Many Samsung’s listed and non-listed equipment partners are also expecting many orders from Samsung Electronics at the end of this year.

As Samsung Electronics is constructing its facility in Pyeongtaek followed by ones in Giheung and Hwasung, it declared that it will be establishing world’s biggest semiconductor production cluster. This is as if modern day alchemy where sand (silicon, main material of semiconductor) is considered as more expensive than gold is taking place in these three locations.

Market prices for houses fluctuated. “Market prices for apartments in Pyeongtaek are being discussed at an average price between $6065 and $6932 (7 million and 8 million KRW), which is about $433 and $520 (500,000 and 600,000 KRW) higher compared to first quarter of last year.” said a representative for a real estate located nearby Godeok Industrial Complex. “Compared to how Samsung’s Pyeongtaek facilities had brought favorable factors in 2011, market prices have risen by about 25%.”

An owner of a junk shop, who had some land near the entrance of this facility, heard that Samsung Electronics is building a semiconductor facility in Pyeongtaek and built a temporary building with an approximate size of 79 m2 and put it on a lease. A resident who is leasing this building set up a convenience store with 5 years of contract, $86,644 of deposit, and $6,238 of monthly payment.

Construction of this facility was not easy. It was revealed that a civic group, which was interrupting with construction, was based on formal and current gang members after an investigation done by police. This group until recently pressured Samsung Electronics to use local equipment, local employees, and local businesses while playing a funeral march at the construction site. However this group disappeared after a police investigation.

Biggest obstacle is power supply. Dangjin-si did not approve construction of North Dangjin substation, which is to supply power to Samsung Electronics’ facilities in Pyeongtaek from Dangjin’s thermoelectric power plant, due to residents’ property rights and others. During a lawsuit that was filed by Korea Electric Power Corporation on Dangjin-si regarding ‘Cancellation of rejection disposition of approval of construction of North Dangjin substation’, court ordered Dangjin-si to cancel its rejection disposition of approval of construction. However this problem can drag on if Dangjin-si appeals this decision. Anseong-si is also being uncooperative. It is not approving construction of transmission line that connects facilities in Pyeongtaek with West Anseong substation due to objections from residents.

“It is very difficult to construct facilities in South Korea due to many regulations, local egotism, anti-group’s twisted claims and others.” said a representative of South Korea’s industrial world with lamentation.

Staff Reporter Han, Juyeop | [email protected]