Plans by Kakao, Woori Bank, and Shinhan Bank to build a mega data center in Namyangju, Gyeonggi Province, have failed to gain momentum due to a suspension of the review process. The failure to sufficiently present plans to secure the electricity and water needed to operate the data center is understood to have been the stumbling block.
According to the Ministry of Land, Infrastructure and Transport (MOLIT) and Namyangju City on the 27th, the Wangsuk Urban High-Tech Industrial Complex development project was suspended during a review by the working-level committee of the Metropolitan Readjustment Committee on the 24th of last month. The Metropolitan Readjustment Committee is a body that reviews the appropriateness of major land-use projects in the greater Seoul area.
Currently, three entities are pursuing data center construction at the Wangsuk complex: Kakao, Woori Bank, and Shinhan Bank. Among them, Kakao's second data center was planned at a scale of 80 megawatts (MW), while Woori Bank and Shinhan Bank have planned data centers of 80 MW and 50 MW, respectively. The target completion date is 2029.
In suspending the review, the Metropolitan Readjustment Committee requested a re-examination of the large-scale power and water supply plan, the plan to utilize in-house renewable and distributed energy, and the population-inducement effect. The biggest obstacle was the power supply plan. Adding the demand from the three new data centers (210 MW) to the existing complex's power demand (90 MW) brings the total to 300 MW, but critics pointed out that the plan submitted by Namyangju City did not sufficiently prove that it had enough spare capacity to cover this.
In addition, the committee pointed out the structure of relying solely on external power grids and also called for measures to utilize in-house renewable and distributed energy, such as solar power. It also issued a demand to present data that precisely compares and analyzes the difference between the resident companies and population-inducement effects at the time of Wangsuk district's first review and after the industrial complex designation, as such differences are inevitable.
As administrative procedures are delayed, the concerns of Kakao and the two banks appear to be deepening. Kakao had originally planned to invest about 600 billion won to build an AI data center (AIDC) in Namyangju to accelerate its company-wide AI transformation (AX), the operation of AI services within its platform, and its entry into the cloud business. This is because its existing "Data Center Ansan (40 MW)" alone has limits in handling the surging demand for data.
This stands in contrast to Naver, which operates the country's largest 270 MW "Gak Sejong" and the 40 MW "Gak Chuncheon," and is pursuing a joint AI factory construction project on the world stage in partnership with Nvidia. Woori and Shinhan banks, which were preparing for sweeping digital transformation, are also growing increasingly concerned about the construction delays.
Some point out that, at a time when data center expansion is urgent, delaying the timing of investment due to regulations could cause the country to miss the "golden time" for securing national competitiveness. Choi Keun-hee, professor emeritus of urban administration at the University of Seoul, said, "AI and data center infrastructure is a field where speed competition is taking place worldwide." He added, "The longer permit delays drag on, the later companies' investment decisions will be, and as a result, this could have a negative impact on securing competitiveness at the national level."
The re-review of the Wangsuk complex development project is scheduled for the end of August. Namyangju City's position is that it has prepared supplementary measures for most of the points raised. A Namyangju City official explained, "We have completed preparing supplementary documents reflecting MOLIT's requirements," adding, "We have already secured 1,500 MW of power through a KEPCO substation, and by mandating the installation of solar thermal facilities in newly occupied buildings, we can sufficiently meet renewable energy standards as well."
