Jeonnam-Gwangju backs 5tn-won chip plan, rejects water claim

Five trillion won in fiscal incentives for 2027, including 1.5 trillion won for semiconductors, is the central figure in Jeonnam-Gwangju Special Metropolitan City's response to reports about the planned Honam chip cluster.

On the 9th, city spokesperson Bae Mi-kyung told a briefing at the Gwangju government complex that some reports had distorted the support committee's remit, the scale of support and the status of water supply.

What did the support committee approve?

On Aug. 31, the committee deliberated and confirmed a plan to provide 5 trillion won in fiscal incentives for 2027. Bae said: “The support committee is not a specialized body that reviews the technical feasibility of individual semiconductor projects.”

The city said the 6 trillion won figure cited in some reports represented the sum of support over four years. The city had not finalized annual support amounts from 2028 onward.

The confirmed 2027 plan totals 5 trillion won, including 1.5 trillion won for semiconductors.

Why did the committee's civilian membership become contentious?

Reports describing two civilian members by their occupations—a cafe owner and a doctor—drew a rejection from Bae. The member called a cafe owner was a young entrepreneur who founded a local brand and expanded it to Seoul and Incheon. She said participation by local startup operators and young people was natural.

She said the member called a doctor was president of Chonnam National University, the region's flagship national university. Calling that president merely an orthopedic surgeon was inappropriate, she said, because the university trains semiconductor talent.

The disputed civilian members were a young startup founder and a university president, not the occupations named in reports.

Can four semiconductor fabs obtain enough water?

The city put projected demand at 603,000 tons per day for four fabs. It said the central government and Jeonnam-Gwangju had secured water sources of 1.06 million tons per day, including reserve volumes.

Bae said: “It is not that Honam has no water, but that investment in infrastructure to use it for industrial purposes has been insufficient.”

The city is pursuing agreements with Samsung Electronics and SK hynix within this year on using 200,000 tons of reclaimed wastewater. Household water from Dongbok Dam will continue as before.

Bae said next year's government budget proposal includes 119.6 billion won for water-supply projects.

The city says water volume is sufficient; industrial delivery infrastructure is the unresolved issue.

What did the central government say?

On the 5th of this month, the Office for Government Policy Coordination and the Prime Minister's Secretariat issued an explanatory statement saying the reports were not factual. The Prime Minister's Office said the committee addresses decentralization and balanced growth rather than semiconductor projects alone.

Ministries handling the semiconductor sector and private-sector experts serve as members. The office said it would consider adding further semiconductor industry experts.

The central government has rejected the reports and describes the committee as a broader regional-development body.

What remains unresolved?

The city characterized the reports as distorted and disparaging, demanded a correction and an official apology, and said it would respond using every necessary means. The dispute now covers the committee's mandate, civilian membership and industrial water supply.

For the planned fabs, the open items are annual support from 2028, reclaimed-water agreements with Samsung Electronics and SK hynix, and the 119.6 billion won water-supply proposal for next year.