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Hynix new plant might hit bureaucratic roadblock
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Monday, January 15, 2007
The South Korean government may put off deciding whether to allow Hynix Semiconductor Inc. to build a new plant near Seoul, a official said Friday.
Hynix, the world's second-largest computer chip maker, has been pushing to expand its current facilities in Icheon, about 80 kilometers south of Seoul, by investing US$14 billion on a new semiconductor facility. The plan, however, runs counter to current government policy that bans construction in and around the capital city to prevent over-concentration of economic capacity.
The government has had reservations about the envisioned plant due to concern that it could have a negative impact on the environment. Authorities were scheduled to make a final decision on the issue on Monday.
"The government will need additional time to review Hynix's plan, as we were notified by the company last week that they will submit a new plan soon," Lee Jae-hoon, the Ministry of Commerce, Industry and Energy's industrial policy division chief, told reporters.
Officials have not yet received the new plan from the company, he added.
Industry observers are closely watching the decision, as President Roh Moo-hyun said last week that his government "will not permit the construction of additional factories in the Seoul metropolitan area, except for some special cases."
Roh's remarks were seen as the government's opposition to Hynix's construction of the plant.
In December 2006, the South Korean government gave the green light for four large enterprises, including consumer electronics maker LG Electronics Co., to build new plants in the designated zone near Seoul, a decision widely deemed to be aimed at promoting sluggish corporate investments.
Hynix has been demanding the government ease restrictions in the zone, which is prompting an outcry from many local companies that argue they are only hampering their business activities and are forcing them to move factories overseas.
The company, meanwhile, said that because it will be bad for business to put off its plans for the Icheon plant, Hynix will forward a "reasonable" and modified proposal that addresses the concerns.
"The revised proposal will include maximizing positive synergy for the company and helping the local economy that can benefit from the new investment," a spokesperson said.
By: DocMemory
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