Korean government locks in local government cooperation to speed up semiconductor power supply

The Korean government has once again pledged to ensure timely electricity supply for the semiconductor industrial complexes planned in the Honam region and Yongin.

On August 12, the Ministry of Climate, Energy and Environment, Jeonnam-Gwangju Integrated Special City, KEPCO, Samsung Electronics, and SK Hynix signed an agreement aimed at accelerating power-grid construction and drastically shortening administrative procedures.

The government is particularly emphasizing cooperation from local authorities. In the past, construction of transmission infrastructure around the Pyeongtaek semiconductor complex was delayed by up to 21 years due to local opposition and insufficient cooperation from municipalities.

The challenge now is much bigger. The key transmission routes and construction schedules for the Honam semiconductor cluster have not yet been finalized, while Yongin will also require long-distance transmission lines to bring electricity from the east coast and central regions.

At the same time, planned AI data centers could require up to 18.4 GW by 2035. Combined with the semiconductor clusters, potential demand could reach roughly 38.4 GW.

Korea's transmission infrastructure is already struggling to keep up: between 2020 and 2026, power-generation capacity increased by 22.1%, while transmission-line capacity increased by only 4.4%.

Experts say the biggest obstacle will be local opposition to transmission towers and substations. Proposed solutions include dedicated government teams for negotiations and compensation, clearer compensation standards, and potentially undergrounding transmission lines in areas with particularly strong opposition—even though underground construction can cost around five times more.

The government is pushing for a much faster build-out, with Industry Minister Kim Jung-kwan saying that even completing the Honam semiconductor fabs in 2029–2030 would be too slow.

Bottom line: Korea is trying to accelerate the power infrastructure needed for its semiconductor + AI build-out, but the transmission grid and local permitting/acceptance could become the real bottleneck.

For SK Hynix and Samsung, this is potentially a very important infrastructure story to watch.