South Korea will sharply ease the permitting and construction rules that have delayed corporate investment. Administrative procedures for Hyundai Motor's (005380) electric vehicle plant project in Ulsan, which had been projected to take up to 40 months, will be compressed to within 12 months, and operators of semiconductor fabrication plants will be allowed to order electrical and telecommunications work in a single contract. The government estimates the steps will speed up a combined 7.9 trillion won ($5.7 billion) in investment projects now waiting on the ground.
Lee Hyoung-il, deputy prime minister and minister of finance and economy, announced the second field-focused package to support corporate investment and innovation on Oct. 1 at a meeting of the emergency economic headquarters that doubled as a ministerial meeting on economic affairs. Following a first package announced in August, the new measures focus on removing causes of investment delays, based on requests from companies and local governments.
The largest project is Hyundai Motor's conversion of its Ulsan plants. The automaker plans to invest about 4 trillion won to completely rebuild its No. 1 and No. 4 plants in Ulsan into production lines centered on self-driving electric vehicles. Under existing rules, the process was expected to take as long as 40 months, running through review of the business plan, environmental, traffic and disaster impact assessments, and construction and safety permits. The government will sign a memorandum of understanding between the city of Ulsan and Hyundai Motor and run multiple procedures in parallel to cut the total period to within 12 months. A dedicated project manager will also be designated at the local government to provide one-stop support.
Investment in clean hydrogen will also resume. Bidding for the clean hydrogen power market, which had been halted after a competitive tender notice was canceled last year, will reopen this month, supplying 500 gigawatt-hours a year under 15-year fixed-price contracts. The government expects about 3 trillion won in production and power generation facility investment once operators are selected.
The government will also shorten the period for revised consultations on environmental impact assessments related to new technology for blending liquefied natural gas at byproduct combined-cycle power facilities — plants that burn byproduct gases from industrial processes as fuel — to within one month from more than three months. The change is expected to bring forward about 69.7 billion won in fuel cost savings.
For the Muan national industrial complex, a fast-track process will cut permitting and impact assessment procedures by more than a year. Investment tied to the complex totals 761.5 billion won. The government will also extend special rules on hazardous materials safety management for secondary batteries to companies supplying related materials, parts and equipment, a step intended to encourage about 70.2 billion won in new investment. It will additionally support the acquisition of about 40 billion won worth of land so that a maker of underwater acoustic sensors, or sonar, can expand manufacturing facilities.
For semiconductor plant expansions by companies including SK hynix (000660), the government will change how construction itself is ordered. Electrical work and telecommunications work must currently be contracted separately, but from next year the two will be allowed in a single order for semiconductor fabs. The change reflects industry arguments that fabs are large-scale, specialized projects in which coordination across electrical, telecommunications and other processes is critical, and that separate contracts can cause delays in scheduling and maintenance.
Rules on cylinder cabinets, which protect gas containers used in semiconductor production, will also be eased. Adding a cabinet now requires a technical review and a permit revision each time, taking at least a week per case. Under a special semiconductor notification to be enacted next year, technical reviews and permit revisions will be processed together when multiple cabinets are installed. If 10 cylinder cabinets were added in two stages, for example, the procedures previously had to be repeated for each installation, but will now be handled in a single batch.
Support for new industries will proceed in parallel. For solar power installations on farmland, where farming continues alongside power generation, the government will push to widen the exemption threshold for small-scale environmental impact assessments to projects of less than 20,000 square meters from the current 7,500. It will also seek expedited designation under the regulatory sandbox to allow standalone reformers that produce hydrogen inside buildings, provided safety measures are in place. A standalone reformer extracts hydrogen by reacting hydrocarbons with steam at high temperatures.
Fiscal support for advanced industries will increase as well. The government will provide 5 billion won to secure core technologies for process equipment handling wafers of 8 inches or larger for next-generation power semiconductors, and 7 billion won for testing infrastructure. It will spend 13.3 billion won on development of next-generation secondary battery technology for humanoid robots, and 100 billion won in state funds from next year through 2029 on the development of actuators, sensors and robot hands, the three weakest component areas in robotics. "We will clear blocked investment and resolve difficulties on the ground," Lee said. "We will provide support so that investment projects worth a total of 7.9 trillion won that are waiting on the ground can be carried out quickly."
