South Korea's Ministry of Employment and Labor and the Ministry of Trade, Industry and Energy successively denied claims circulating online on July 1, stating that the government sending letters to Samsung Electronics and SK Hynix requesting a review of performance bonus clauses, as well as distributing excess profits of large enterprises to subcontractors, were all false, and announced they would report malicious rumor spreaders to investigative authorities. On the same day, Samsung Electronics, SK Hynix, and the South Korean government announced that the country's second semiconductor production base has been selected in the southwestern region.
Specific Statements of the South Korean Government's Denial
The Ministry of Employment and Labor told media via text message that the relevant posts were "completely groundless" and contained "false information," and that they would report malicious spreaders to investigative authorities. The Ministry of Trade, Industry and Energy stated, "The claim that the government sent official letters to Samsung Electronics and SK Hynix is entirely fabricated," and likewise said it would take strong measures. The rumors mainly included two types of claims: that the government sent letters to the two companies requesting a review of clauses in labor agreements that distribute profit percentages as bonuses; and that the government was considering distributing excess profits of large conglomerates to subcontractors or accumulating them in funds.
Scale and Key Demand Data of the Southwestern Semiconductor Base
According to the joint announcement on Monday, the main plans for the southwestern semiconductor base are as follows:
Site Selection: South Chungcheong Province, Gwangju, and South Jeolla Province
Factory Plans: Four memory fabs (two for Samsung, two for SK Hynix)
Power Demand: 6.3 GW (equivalent to the capacity of four to five 1.4 GW nuclear reactors)
Daily Water Demand: Approximately 646,000 tons (actual demand when all four factories operate simultaneously is about 800,000 tons)
Renewable Energy Advantage: Abundant solar and wind resources in South Chungcheong Province help companies achieve RE100 goals
Three Major Infrastructure Challenges: Yongin Progress, Power Storage, and Water Resources
Professor Park Jae-geun of Hanyang University stated that the top priority is ensuring the existing facilities in Yongin City are completed on time: Samsung aims to shorten the construction period by seven years, while SK Hynix aims to advance production by twelve years. He emphasized: "If this timing is missed, the subsequent South Chungcheong plan will fail like dominoes."
On the power front, the government plans to expand energy storage to stabilize the grid, but Professor Park Joo-heon of Dongduk Women's University noted there is currently no specific estimate of storage capacity or cost. On water resources, K-water CEO Yoon Seok-dae said an additional supply of over 300,000 tons is possible, while the government is also evaluating building an ultrapure water treatment plant costing over 1.3 trillion won. Professor Kim Yong-seok of Gachon University emphasized the biggest obstacle is talent: "Electricity and water issues can be solved with money, but the real problem is talent."
Frequently Asked Questions
What specific claims do the rumors that the South Korean government denied involve?
The rumors claimed that the government sent official letters to Samsung Electronics and SK Hynix requesting a review of clauses in labor agreements that allocate a certain percentage of profits as performance bonuses; another rumor claimed the government was considering distributing excess profits of large conglomerates to subcontractors or accumulating them in funds. Both the Ministry of Employment and Labor and the Ministry of Trade, Industry and Energy formally denied them on July 1, stating that the relevant claims were "entirely fabricated."
How large is the gap between the water demand and actual supply for the southwestern base?
The daily water demand when all four factories operate simultaneously is about 800,000 tons, while the government estimates 650,000 tons. The water volumes of the Seomjin River and Yeongsan River are far lower than the Han River, and the water quality of the Yeongsan River ranks lowest among South Korea's five major rivers. K-water says it can provide an additional over 300,000 tons, and the government is also evaluating building an ultrapure water treatment plant, but details of the plan had not been announced as of the report.
Why is the completion progress of the Yongin facilities a prerequisite for the entire southwestern plan?
Professor Park Jae-geun of Hanyang University said that if the Yongin facilities are not completed on time, the subsequent South Chungcheong plan will fail like dominoes. Samsung Electronics Vice Chairman Jeon Young-hyun on Monday called on the government to provide "rapid, one-stop administrative support and state-led infrastructure construction" to accelerate progress.
