Localism Delays a $120 Billion Semiconductor Complex: The Mayor of Yeoju.

Investments of over 120 trillion won are currently underway for South Korea's semiconductor industry, the core of the country's economy. However, the actions of a local government official who has delayed this crucial project for months with demands of "pay for water" have garnered attention from the Board of Audit and Inspection (BAI). This issue, accompanied by the BAI's stern scrutiny and special requirements directed at local governments nationwide, calls for a discussion on the interaction between the semiconductor industry and local government administration.

 

The semiconductor industry is a vital element of the South Korean economy, contributing significantly to the national economy and job creation.

 

The BAI recently released an audit report on "Efforts to Improve Passive Administration and Regulatory Reform," urging attention to the actions of this local official. Since the official holds an elected position with a guaranteed term, disciplinary action is practically impossible. Nevertheless, the BAI is urging the highest possible measures to be taken and is further encouraging the sharing of such cases with all 243 local governments across the country.

 

Yeoju City's Mayor Lee Chul-woo has come into the spotlight for obstructing the permits for industrial water supply in the Yongin Semiconductor Cluster Project. This project aims to gather semiconductor companies in the Wonam area of Yongin, Gyeonggi Province, with over 2.3 trillion won invested by the public sector to establish infrastructure, and SK Hynix planning to invest 120 trillion won to construct four semiconductor factories. More than 50 semiconductor material, component, and equipment companies, including the Netherlands' ASML, are also set to move in, expected to create over 17,000 jobs and over 188 trillion won in added value.

 

However, industrial water supply was crucial for the smooth progress of this project. The project's implementer had met all relevant permit conditions until June 2020, and agreements regarding industrial water supply had also been reached. Nevertheless, Mayor Lee, who was elected in June last year, abruptly halted the permit process, causing a delay in the project. To grant the permits, he demanded that various local issues in Yeoju City be addressed by the central government and Gyeonggi Province. As a result, Yeoju City agreed to undertake activities such as releasing conservation zones, relaxing regulations, developing Nunggok Station area, and improving sewage systems.

 

According to the BAI's investigation, the conditions set by this local official were unjust to the project implementer since the central government and Gyeonggi Province resolving local issues did not align with the permit conditions. Mayor Lee's handling of the water supply issue has created uncertainty in local economics and corporate activities.

 

The semiconductor industry is a vital element of the South Korean economy, contributing significantly to the national economy and job creation. However, the halt of a project due to the abuse of authority by a local government official can have a severe impact on both the national and local economies. This case underscores the importance of regulatory reform and cooperation in local government administration and necessitates an in-depth examination of the repercussions of the delayed project.