South Korea is planning to establish a major semiconductor manufacturing hub in the country’s southwestern region. The proposed Honam industrial complex is expected to cost at least 800 trillion won, equivalent to approximately $540 billion.

The project is part of a broader strategy to support the artificial intelligence industry and distribute high-technology investment beyond the Seoul metropolitan area. The government aims to have the main infrastructure in place by 2030.

Four semiconductor fabrication plants are planned for the complex. However, analysts estimate that these facilities alone could require electricity equal to between 70% and 80% of the southwestern region’s current annual consumption.

Providing enough water will be another major challenge. Authorities estimate that the semiconductor cluster could require approximately 650,000 metric tonnes of water every day. This is more than the entire daily residential water supply currently used by the city of Gwangju.

The government is considering additional power infrastructure, including new nuclear plants and small modular reactors. Other proposals include using reclaimed water, upgrading existing dam systems and constructing additional electricity transmission lines.

Some local communities have opposed the expansion of nuclear facilities, changes to dams and the development of major infrastructure without sufficient public consultation.

The new industrial complex could further strengthen South Korea’s position in the global market for chips used in artificial intelligence systems. However, the government and participating technology companies will first need to address significant challenges involving electricity, water supplies, construction schedules and local public support.