FKI Proposes 41 Policy Tasks for Advanced Industries: Solutions for Road and Water Supply Issues Ahead of Factory Operations

The Federation of Korean Industries (FKI) has officially submitted 41 policy tasks to the government and the National Assembly to enhance the competitiveness of national advanced strategic industries, including semiconductors, batteries, displays, biotechnology, and robotics. The core of this proposal is the urgent need to resolve shortages in basic infrastructure, such as roads and water supply, which can arise as large-scale investments transition into actual factory operations and production. In reality, advanced factories require massive amounts of water and efficient logistics roads, but on the ground, infrastructure development often fails to keep pace with factory completion, leaving companies in a state of distress. For example, even if a large-scale semiconductor complex is built, if essential facilities such as access road expansions or wastewater reuse systems are not ready in time, an emergency situation could occur where the factory, which cost astronomical sums to build, must be shut down. Reflecting this sense of crisis, the business community has categorized the tasks into 20 items that can be implemented immediately without legislative amendments and 21 items requiring National Assembly legislation, calling for effective countermeasures. In this article, we will examine in detail the specific challenges faced by advanced industry sites and the solutions proposed by the FKI by sector. It is a time when public and investor interest is at its peak regarding how much the government will reflect corporate voices to deregulate and accelerate infrastructure development.

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FKI Proposes 41 Policy Tasks for Advanced Industries: Solutions for Road and Water Supply Issues Ahead of Factory Operations

1. Urgent Need for Early Securing of Road and Water Infrastructure in the Semiconductor Sector

The most urgent issue cited by the semiconductor industry is the reality that it is difficult to secure basic facilities like roads and water supply in time, even with factory operations looming. In the case of the Yongin Semiconductor Cluster, the first factory aims to begin internal facility operations as early as February 2027, making the timeline extremely tight. Amid such a tight schedule, the road expansion project for National Route 57 between Wonsam and Mapyeong, necessary to handle surrounding traffic, is still awaiting the announcement procedure, causing frustration among stakeholders. If the factory is built but the roads for commuting and logistics are blocked, companies would have to bear enormous losses, leading to strong calls to significantly accelerate the relevant procedures.

There is also a growing call to drastically reduce the construction period for the wastewater reuse facility essential for the Cheongju semiconductor site. This massive project, which requires a daily water supply of 35,000 tons, has a total cost of 62.2 billion won, with costs shared equally between the public and private sectors. However, following standard procedures, it would take a long 42 months from project initiation to groundbreaking, making it nearly impossible to meet the semiconductor factory’s operational timeline. Consequently, a specific alternative has been proposed: boldly applying private investment special provisions to shorten the total project period to within 18 months and explicitly stating the basis for national funding support in the related enforcement decree.

2. Improving Stable Power Procurement and Carbon-Neutral Power Trading Systems

Since advanced semiconductor manufacturing processes consume enormous amounts of electricity, building a stable carbon-neutral power supply network has emerged as a core task determining corporate survival. For semiconductor companies, which are heavy power consumers, a certification system that allows for the smooth procurement of eco-friendly power is essential to achieve carbon neutrality goals while maintaining stable factory operations. In particular, there are strong demands to allow companies to directly purchase eco-friendly power, such as large-scale hydropower, with capacities exceeding 20 megawatts.

Currently, direct trading of large-scale hydropower is difficult or restricted, causing global companies aiming for RE100 to face significant difficulties in securing power within Korea. Therefore, if the government gradually allows direct trading of large-scale hydropower and promptly establishes reasonable settlement criteria, it will greatly help alleviate corporate power shortages. Only by increasing the flexibility of power procurement will domestic advanced companies have the motivation to continue investing in Korea rather than relocating production bases overseas.

3. Tax Incentives and Carryover Deduction Extensions for the Battery and Display Industries

In the battery and display sectors, bold tax incentives and measures to reduce investment burdens are urgently required to survive in the increasingly fierce global market competition. Given the nature of these industries, which involve large-scale equipment investments, the prevailing opinion is that a system allowing for direct refunds or transfer to third parties should be introduced to enhance the effectiveness of investment tax credits. The display industry, while continuing investments for the future despite sluggish market conditions, is complaining that it is difficult to fully enjoy the benefits under the current carryover deduction period.

Accordingly, there is an urgent request to significantly extend the tax credit carryover period for the display industry from the existing 10 years to 20 years and to apply the related system retroactively to past investments. Along with this, there are strong voices calling for further expansion of the special provision for professional research personnel to secure the core competitiveness of the battery industry by stably acquiring excellent R&D talent. If the government and local governments step up to provide joint evaluation facilities for energy storage systems, which are difficult for individual companies to build, small and medium-sized partner companies can also benefit greatly.

4. Easing Unreasonable Regulations and Expanding Tax Benefits for the Bio Industry

In the bio-pharmaceutical R&D and production fields, overly stringent regulations are hindering domestic companies, necessitating prompt institutional improvements. A representative task is to relax the manufacturing unit requirement for Good Manufacturing Practice (GMP) standards in the initial trial production stage from the existing 3 units to 1. In the early stages of new drug development, enormous costs are incurred, and if prototype production is delayed due to unnecessary overlapping regulations, companies will inevitably fall behind in global competition.

There are also continuous points raised that innovative synthetic new drugs and core active pharmaceutical ingredients should be included in the scope of national strategic technologies to raise tax support benefits to the level of other advanced industries. To strengthen the domestic production base, the scope of tax credits for vaccine or bio-pharmaceutical production in Korea should be broadened, and unnecessary domestic sales requirements should be boldly removed. Only if the government significantly deregulates and strengthens tax benefits can domestic bio companies build factories in Korea, creating high-quality jobs, rather than going overseas.

5. Data and Infrastructure Support for Emerging Industries such as Robotics and Future Vehicles

In the advanced robotics industry combined with AI and the future vehicle sector, opening up data and computing resources is paramount to accelerating innovative technology development. Researching humanoid robots or physical AI technologies requires massive amounts of video and audio data, but various security regulations make it very difficult to utilize them on the ground. Regulations should be applied flexibly to allow the free use of original data within thoroughly verified safety demonstration zones to speed up R&D.

Furthermore, the government should boldly expand the scope of high-performance computing resources and national project support to include large corporations, which have been overlooked until now, to raise the overall technological level of the industry. In addition, future eco-friendly vehicle technologies and air-source heat pumps should be newly included in tax credit targets, and the government should actively support public sector demand for home appliances equipped with domestic AI-based models. Only with such multi-faceted support can our companies gain an advantage in the rapidly changing global technology hegemony competition and secure future growth engines stably.

6. Outlook and Tasks for Implementing Policy Tasks for the Leap in Advanced Industries

The 41 policy tasks proposed by the FKI this time can be seen as a critical survival strategy for the future of the Korean economy, going beyond simple corporate demands. To prevent an unprecedented situation where factories are built but cannot operate due to lack of water and roads, government ministries, local governments, and the National Assembly must act swiftly, transcending political factions. Fortunately, since a significant number of tasks can be resolved through enforcement decree amendments or administrative procedure shortening without legislative amendments, the government can produce visible results immediately if it has the will. We hope that readers will listen to the voices from the ground facing domestic advanced industries and continuously watch for policy changes by the government and the legislative process by the National Assembly. For Korea to firmly establish itself as a world-class advanced industry powerhouse, corporate investment and government regulatory innovation must work in perfect harmony. We sincerely hope that the on-site difficulties will be resolved promptly, providing an opportunity for the Korean economy to leap forward powerfully once again.

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