November 26, 2024

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Samsung Electronics' chip-manufacturing complex in Pyeongtaek, Gyeonggi Province. Samsung's chip plant is considered one of the most coveted facilities to facilitate the local economy. (Bloomberg)

Ahead of Wednesday’s local elections, candidates are making their last-minute pleas for votes, with some of them talking big to take advantage of big name companies and their huge investment plans unveiled recently.

Politicians offering populist pledges is nothing new during election campaigns, but this year their rhetoric appears to have gained some weight as they come along with a series of new investment plans, worth a combined 1,000 trillion won ($800 billion), announced by the nation’s top conglomerates over the past week.

Amid people’s heightened interest in where the massive spending will go, candidates who are competing for 17 metropolitan mayors and provincial governors and hundred others of lower-level council seats are issuing promises that are closely linked to new growth drivers of big businesses.

The most frequently cited names are Samsung and SK, the nation’s No. 1 and No. 2 conglomerates that plan to invest 450 trillion won and 247 trillion won, respectively, over the next five years with their renewed emphasis on chips.

Their costly, sophisticated chip-manufacturing plants, in particular, are coveted facilities that create hundreds of jobs and other ripple effects in the local economy.

Gyeonggi Province’s governor candidate Kim Eun-hye of the ruling People Power Party who is the front-runner has said she would host a “big chip company” by creating a 400,000- to 500,000-square-meter industrial complex in the northern part of the province.

“Currently, we are carrying out a feasibility study on several candidate areas and about 110 trillion won will be poured into the project,” she said last week in a press conference.

“Upon my inauguration, a task force will be set up to execute the plans right away. By hosting a big company in the northern part of the province along with the existing LG Display in Paju, I’ll make people there feel the change immediately.”

Even though she didn’t specify names, it was obvious she was referring to Samsung Electronics and SK hynix, the world’s top two memory chip makers, that already operate production facilities in Gyeonggi Province.

Kim Dong-geun, the ruling party’s candidate for Uijeongbu mayor, also recently pinpointed Samsung and SK hynix as the key candidates to be relocated to the site of the departing US military base Camp Humphreys in the city.

Noh Young-min, a governor candidate for North Chungcheong Province of the main opposition Democratic Party, has also pledged to host SK hynix’s new plant in the city of Cheongju adding to the chipmaker’s existing chip plant there.

Early this month, Gangwon Province governor candidate Lee Kwang-jae, of the opposition Democratic Party, said he would create a future mobility cluster in the Wonju area by hosting Hyundai Motor’s key business divisions for futuristic technologies, including self-driving cars, robotics and urban air mobility.

His rival Kim Jin-tae of the People Power Party had already pledged to attract Samsung’s new chip plant into the region.

Foreign tech firms are no exception.

Independent candidate for Gyeonggi governor Kang Yong-suk said in a recent interview that he would reshape Suwon into a Silicon Valley by hosting Apple’s Asian head office.

“(Suwon) would become a global IT city by hosting renowned tech firms and their suppliers,” he said, adding that Apple and Amazon are eyeing a relocation of their regional branches in Korea. “When all the big names are flocking to the city, the housing prices also will surge three- to four-fold.”

Industry officials have remained dubious about such fancy blueprints and claims, saying most of the pledges are groundless empty rhetoric.

“Companies have their own long-term plans, especially huge investments like chip plants,” an industry source said on condition of anonymity. “We are just closely monitoring their pledges but have no plans to study them for now.”

By Lee Ji-yoon (jylee@heraldcorp.com)