Japan's Miyagi Prefecture is mounting an all-out effort to land a memory chip plant from SK hynix (000660), promising infrastructure support, local media reported, after word emerged that the South Korean chipmaker had studied building a facility there.
The Nihon Keizai Shimbun reported on the 31st that local governments are aggressively courting the plant because large-scale investment can generate regional employment. According to the Nikkei, Miyagi officials have been in contact with SK hynix behind the scenes. The prefecture offered a 300,000-square-meter site and has also upgraded the water and power infrastructure essential to a semiconductor plant.
Responding to earlier reports that it was considering building a memory chip production plant in Miyagi, SK hynix said in a regulatory filing that it is reviewing various options, including the construction of additional production bases, to strengthen the competitiveness of its memory business, but that nothing has been finalized. The Nikkei took that as a sign that SK hynix has left the door open, noting that speculation about a Japanese plant has surfaced repeatedly involving the Kanto, Hokkaido and Kyushu regions.
The biggest obstacle to a Japanese plant, however, is the South Korean government's concern over technology leakage. Because Seoul has designated semiconductors, a core industry, as a national strategic industry, approval for construction would be difficult given worries about advanced technology flowing overseas, according to the report. The Nikkei said the chip industry expects that government permission will not be granted for overseas production of advanced products used in artificial intelligence.
For SK hynix, on the other hand, diversifying production bases beyond South Korea will be necessary, the Nikkei said. SK Group Chairman Chey Tae-won has signaled a supply-side response, saying that the memory chip shortage will continue through 2030. In an interview with the Nihon Keizai Shimbun in June, he said Japan has a fully developed semiconductor ecosystem and is an excellent candidate site.
The United States, which is pressing South Korea to invest at home in chips, is also a competitor to Japan. U.S. Commerce Secretary Howard Lutnick said last month that he wants to bring Samsung Electronics (005930) and SK to the United States and have them build plants there. Demands from the administration of President Donald Trump to set up operations in the U.S. are also intensifying. SK hynix held a groundbreaking ceremony for a chip packaging plant in Indiana on the 27th.
Miyagi is staking a great deal on winning the plant. Governor Yoshihiro Murai, first elected in 2005, has pushed to attract manufacturing to the prefecture in response to population decline. He subsequently drew plants from Toyota Motor and Tokyo Electron, rapidly expanding output, but failed to land a semiconductor plant, seen as central to clustering advanced industry. Taiwan's PSMC and SBI Holdings announced plans for a chip plant in 2023 but withdrew them in 2024.
Murai won reelection in an election last October on a pledge to attract a world-class semiconductor company. For that reason, the Nikkei said, he views the campaign to land the SK hynix plant as the final achievement of a gubernatorial tenure spanning six terms and 24 years.
Meanwhile, Chey, who serves as chairman of the Korea Chamber of Commerce and Industry, hosted the 15th Korea-Japan Chambers of Commerce Leaders' Meeting in Sendai, Miyagi Prefecture, on the same day. In his opening remarks, he said the Korea-Japan economic partnership he envisions is not about viewing each country's markets and industries separately but about building a larger market and industrial ecosystem together. He stressed that becoming partners who expand each other's markets could be a realistic choice for both countries. The Nikkei said that although the chambers' meeting is a regular event, local governments are paying close attention to Chey's remarks.
