South Korea's Honam Semiconductor Hub faces power and water challenges

South Korea plans to build the Honam semiconductor industrial complex in the southwest within four years, a project estimated at at least 800 trillion won ($540 billion). The hub, championed by President Lee Jae‑myung, aims to spread the benefits of the AI‑chip boom beyond the Seoul metropolitan area and will host four chip‑fabrication plants. Analysts say the power demand of those fabs could equal 70 % to 80 % of the current annual electricity consumption in the Gwangju, North Jeolla and South Jeolla regions.

Local residents have voiced strong opposition to the massive power and water requirements, objecting to new transmission lines, proposed nuclear reactors and plans to raise an existing dam to supply water. "A huge amount of new power demand is coming into a region that previously had little, and that’s the core of the problem," said Neal Won, principal analyst at S&P Global Energy. Companies such as Samsung Electronics are involved in the project. The energy ministry argues the region already has surplus generation and suggests using local power, underground lines, and possibly new nuclear or small modular reactors to meet the demand. The government seeks to have the complex operating by the end of President Lee’s term in 2030.