Gyeonggi Province Launches Joint Response System with Cities and Counties Against Seoul Metropolitan Area Exclusion in Semiconductor Special Act Enforcement Decree

[Suwon Ilbo = Reporter Kim Gap-dong] Gyeonggi Province has launched a joint response system with cities and counties in response to the Seoul Metropolitan Area exclusion clause contained in the government's 'Special Act Enforcement Decree (Draft) on Strengthening Competitiveness and Support for the Semiconductor Industry.'

On March 28, the province held an 'Emergency Policy Meeting Between Province and Cities/Counties Regarding Seoul Metropolitan Area Exclusion in the Semiconductor Special Act Enforcement Decree (Draft)' at Yulgok Hall of Gyeonggi Provincial Government, chaired by Hyun Byung-cheon, Director of Future Growth Industries, with participation from heads of departments and divisions from cities and counties in the province, as well as related organizations including the Next-Generation Convergence Technology Institute, Gyeonggi Economic Science and Innovation Agency, and Korea Nano Technology Institute.

The meeting was held to discuss joint countermeasures between Gyeonggi Province and cities/counties following the Ministry of Trade, Industry and Energy's inclusion of 'non-Seoul Metropolitan Area' as a requirement for semiconductor cluster designation in the enforcement decree (draft) currently under legislative promotion.

On March 21, the province officially submitted opinions to the Ministry of Trade, Industry and Energy requesting deletion of the Seoul Metropolitan Area exclusion and non-Seoul Metropolitan Area preferential clauses from the enforcement decree (draft). Through this meeting, the province plans to share current issues with cities and counties and strengthen the joint response system.

The meeting focused on discussions regarding △the legislative promotion status of the Semiconductor Special Act Enforcement Decree (Draft) and problems with Seoul Metropolitan Area exclusion clauses △impacts of the enforcement decree (draft) on the semiconductor industry △joint countermeasures between the province and cities/counties.

The province is currently promoting the creation of a K-Semiconductor Mega Cluster with a total scale of 1,126 trillion won, centered on Yongin, Pyeongtaek, Icheon, Hwaseong, and Seongnam. Investment from global semiconductor companies including Samsung Electronics and SK Hynix, as well as ASML, AMAT, and LAM continues.

Cities and counties participating in the meeting raised serious concerns about the possibility of regional industrial damage in preparation for the enforcement decree (draft).

The types of damage can be summarized into three categories.

First, there is concern that regional strategies developed to attract and nurture foreign investment companies and semiconductor materials, components, and equipment (materials and components suppliers) in accordance with government policies could be weakened by the enforcement decree (draft). Osan City mentioned the possibility of setbacks in establishing a research complex linked with global equipment companies such as AMAT, and Bucheon City stated that the enforcement decree (draft) could have negative impacts during foreign company investment negotiation processes linked with DB Hitek. Gwacheon City expressed concerns about negative effects on AI and AX new industry development strategies utilizing Jisik Information Town and land formerly used for anti-corruption facilities and racetracks. Siheung City raised the possibility of reduced ecosystem vitality for physical AI specialized zones and strategic industries. Seongnam City pointed out that policy confusion could arise between its Fabaless 10x Growth Strategy centered on Pangyo and the Seoul Metropolitan Area exclusion clause.

Second, concerns were raised about potential setbacks in developing hinterland areas linked with anchor companies such as Samsung Electronics and SK Hynix. Pyeongtaek City stated that negative impacts are expected on hinterland area development linked with Samsung Electronics' 5th and 6th plants and on attracting materials and components suppliers investment. Hwaseong City explained that concerns have grown in the regional industry following the announcement of the Seoul Metropolitan Area exclusion clause during preparations for designation of the third phase materials and components suppliers specialized complex. Suwon City also stated that difficulties are anticipated during the promotion of Samsung Electronics-centered research specialized zones and economic free zones.

Finally, concerns have also been raised that the damage to northern Gyeonggi regions, which have undergone overlapping regulations for an extended period due to being classified as the Seoul Metropolitan Area, could be further intensified. Yeoncheon County and Gapyeong County appealed that despite enduring various regulations for decades as depopulation and border regions, they could be hamstrung again by Seoul Metropolitan Area regulations. Goyang City expressed concern that industrial growth stagnation and sluggish industrial complex leasing could further weaken potential for hub growth in the future should inter-Korean relations improve. Uijeongbu City explained that development strategies for return-provided areas and economic free zones are experiencing setbacks due to overlapping regulations. Gimpo City pointed out that despite having significant potential for advanced industries linked with airports and ports, the enforcement decree (draft) could weaken future growth drivers.

Going forward, the province plans to maintain cooperative systems with cities and counties and related organizations in connection with the Semiconductor All-Care Task Force, and to establish joint response strategies reflecting the location and industrial characteristics of each city and county, including semiconductor production bases such as Yongin and Pyeongtaek, materials and components suppliers industrial cities such as Ansan, Hwaseong, and Osan, and regulated areas in northern and eastern Gyeonggi.

The province also plans to establish a coordination system with other Seoul Metropolitan Area local governments and related organizations including Seoul and Incheon to respond jointly during the enforcement decree legislative notification and related organization consultation processes.