Gov’t designates seven specialized complexes nationwide

The government announced the results of selecting specialized complexes to foster the nation’s high-tech strategic industries, such as chips, secondary batteries, and displays. Seven have been designated after 21 metropolitan municipalities competed with an average ratio of 3 to 1. Companies investing in this area will be provided with support such as expedited duration of approval.

As for the semiconductor specialized complexes that attracted the most attention, Yongin, and Pyeongtaek, Gyeonggi Province, which are home to Samsung Electronics and SK hynix, have been designated; while Gumi, North Gyeongsang Province, where raw chips material/component makers are located, have been selected. As for secondary battery specialized complexes, Cheongju, Pohang, Ulsan, and Saemangeum, and for next-generation display specialized complexes, Cheonan and Asan City have been designated, respectively. Additionally, Anseong, Busan, Gwangju, Daegu, and North Chungcheong Province have been designated as specialized complexes for materials, parts, and equipment.

The government has implemented the "approval time-out mechanism" for companies moving into these complexes. It is a system in which a request for approval and licensure about water, electricity, location, etc., is considered granted should the local governments not respond to such requests within 60 days from the request. This is designed not to repeat the fate of Samsung Electronics' Pyeongtaek plant, which was delayed for five years due to transmission line issues, and SK hynix's Yongin chips cluster, which has come to a standstill for more than a year due to water problems. Tax cuts and preferential treatment during preliminary feasibility studies will also be given to the beneficiaries.

As the world engages in a race to expand the production base of high-tech industries, it is necessary to nurture clusters where high-tech industry capabilities are pooled together. On top of the U.S. and China, which are currently bombarding the chips and EV industries with tax breaks and subsidies, Japan and Germany, which belatedly joined the chips race, are also striving to nurture chips clusters. Although small in land mass, Taiwan is turning the entire country into a special chips zone.

However, for the designation of a specialized complex to produce tangible results, it must go beyond the failed regional special zone policy of previous administrations. The Moon Jae-in administration designated green and smart industrial complexes nationwide in line with the Korean version of the New Deal policy, and the Park Geun-hye administration established “Centers for Creative Economy and Innovation” across the country. The Roh Moo-hyun administration designated around 100 special development zones specific to the region. Many of these special zones, which were designated as if sharing a pie among regions, eventually lost their momentum following the change of government and currently remain as “special zones in name only.”

The success of the special zone designation ultimately depends on whether businesses continue to provide drivers for investment. Municipalities should be discouraged from enlisting large corporations as if they would do whatever the companies ask them to do and then expect them to pay for them later. Local governments that have succeeded in attracting specialized complexes must preemptively provide services that companies need and engage in fierce competition with each other in building educational, cultural, and medical infrastructure where young people want to stay and live long-term.