The South Korean government will cut permitting and impact-assessment procedures for converting Hyundai Motor's Ulsan plant to electric vehicle production to within 12 months, down from an expected 40 months. Reflecting input from chipmakers including SK hynix (000660), it will also allow bundled contracting of electrical and telecommunications work at semiconductor fabrication plants, or fabs, to speed up capacity expansion.
The government announced the measures, titled the second round of on-site support for corporate investment and innovation, at a joint emergency economic headquarters and economy-related ministers' meeting on the 1st, chaired by Deputy Prime Minister and Minister of Finance and Economy Lee Hyoung-il.
The package focuses on accelerating stalled projects worth a combined 7.9 trillion won ($5.6 billion) in advanced industries such as green industry, secondary batteries and advanced sensors, and on building an investment-friendly regulatory framework in advanced and emerging sectors.
The government will support permits for investment in converting combustion-engine plants to EV production.
Hyundai Motor (005380) plans to fully rebuild its combustion-engine vehicle production lines in Ulsan into a plant centered on autonomous electric vehicles. The investment totals about 4 trillion won.
Environmental, traffic and disaster impact assessments, along with environmental, safety and construction permits, had been expected to take more than three years.
The government plans to shorten administrative procedures including permits and impact assessments to within one year through a memorandum of understanding between the city of Ulsan and Hyundai Motor in the second half of this year. A dedicated project manager will also be designated for one-stop support at the local government level.
The government will also support investment in clean hydrogen production and power generation facilities.
After the competitive bidding notice for the clean hydrogen power market was canceled last year, leaving companies struggling to make investment decisions, the government plans to reopen the bidding market this month.
The auction covers 500 gigawatt-hours a year under 15-year fixed-price contracts. The evaluation will assign greater weight to contributions to the domestic clean hydrogen ecosystem. The measure is intended to support about 3 trillion won in investment.
For new technology that blends liquefied natural gas into byproduct-fueled combined-cycle power facilities, the consultation period for revising environmental impact assessments will be cut to within one month from more than three months. The government expects fuel cost savings of about 69.7 billion won.
Procedures for designating the Muan national industrial complex, pursued as a follow-up to relocating the Gwangju military airport to Muan, will also be shortened by more than a year under a fast-track process. Investment related to the Muan complex totals about 761.5 billion won.
Special safety-management exemptions for hazardous materials related to secondary batteries will be extended to companies in related materials, parts and equipment. The government plans to spur about 70.2 billion won in new investment through the change.
For Ible Photonics, a company specializing in underwater acoustic sensors, or sonar, the government will support its entry into a nearby bio-convergence industrial technology complex, backing about 40 billion won in investment to expand manufacturing facilities.
In semiconductors, the government is pushing regulatory changes to speed up fab expansion.
Under current rules, electrical work and telecommunications work must be contracted separately, making it difficult for general contractors to oversee the projects.
The government will therefore allow bundled contracting of electrical and telecommunications work at semiconductor fabs. It will pursue the rule change next year so that fab expansion can proceed quickly.
SK hynix is said to have raised concerns that handling electrical and telecommunications work separately increases the risk of serious accidents, delays construction because of scheduling coordination, and slows maintenance because of disputes over liability between contractors.
Rules on cylinder cabinets, which protect containers supplying gases used in semiconductor production, will also be eased.
Currently, each time a few additional cylinder cabinets are installed, a technical review and a permit amendment are required, taking at least a week per case. Because changes in the number of cylinder cabinets are frequent given the nature of semiconductor processes, use of production equipment has been delayed.
The government plans to enact a semiconductor exemption notice under the High-Pressure Gas Safety Control Act next year so that technical reviews and permit amendments can be processed together when multiple cylinder cabinets are installed.
The government will also rationalize the threshold for small-scale environmental impact assessments of agrivoltaic solar installations and pursue fast-track designation under the regulatory sandbox to allow standalone reformers to be installed inside buildings, provided safety devices are in place. A standalone reformer is equipment that extracts hydrogen by reacting hydrocarbons with steam at high temperatures.
For next-generation power semiconductors, the government will provide 12 billion won through next year's budget to secure core technology for process equipment handling large-diameter wafers of eight inches or more and to build demonstration infrastructure.
It will invest 13.3 billion won in developing secondary battery technology for humanoid robots.
