Korea's $1,350 Trillion Semiconductor Hub Faces a Basic Problem: Not Enough Power or Water

South Korea bet big on semiconductors. In late June, President Lee Jae-myung announced a 10-year, 1,350 trillion won public-private investment plan covering chips, AI data centers, and robotics. But there’s a problem the press release didn’t mention: the infrastructure to support it barely exists.

The centerpiece is the Yongin semiconductor national industrial cluster in Gyeonggi Province — a mega-site where Samsung and SK Hynix are supposed to build their next-generation fabrication plants. When fully operational, the cluster will need 15 to 16 gigawatts of electricity. That’s roughly a quarter of the entire Seoul metropolitan area’s power demand. The local grid currently supplies about 1.9 GW.

According to Korea’s National Assembly Research Service, roughly 6 GW of the needed 15 GW still has no confirmed supply source. Samsung needs 9 GW total and has secured 6 GW. SK Hynix needs 6 GW and has secured 3 GW. The gap is large enough to delay production timelines.

Korea’s power generation is concentrated on the coasts — nuclear and LNG plants on the east coast, renewables in the southwestern Honam region. The factories sit inland, near Seoul. Bridging that distance falls to Korea Electric Power Corporation (KEPCO), which is building a 37 trillion won, 1,153-kilometer transmission line rated at 345 kV. The target completion date is 2036.

But KEPCO has a track record of delays. The company previously ran into major trouble with the Bukdangjin-to-Sindangjeong transmission line, which fell years behind schedule and cost it 1.17 trillion won in losses. A project of this scale — nearly four times longer — raises obvious questions about execution risk.

Water is the other bottleneck. A single large memory fab consumes over 100,000 tons of water per day. The Yongin cluster, when fully built, is expected to need around 800,000 tons daily. The government’s phased plan starts around 2031, drawing about 200,000 tons from the Paldang Dam’s surplus and treated wastewater. By 2034, new intake facilities and pipelines are supposed to push that to 600,000 tons per day.

Korea is not alone in this bind. Taiwan’s chip industry faces similar water and power constraints, and TSMC has had to truck water during drought years. But the scale of the Yongin project — and the fact that basic infrastructure planning is still catching up to the ambition — makes it a case worth watching.

Whether the 2036 transmission line arrives on time, and whether the wafer supply keeps pace with global demand, will depend on execution, not announcements.