High-Tech Industries, Two Diverging Timetables

At the National Assembly, a seminar on industrial water for the semiconductor industry was held, where participants discussed ways to ensure a stable supply of water for major production facilities such as the Yongin semiconductor cluster. Water emerged as a major issue in a forum meant to discuss the future of the semiconductor industry, with dams, pipelines, and intake sources repeatedly mentioned alongside debates over advanced process and technology competition. That is because semiconductor production requires large volumes of water, and a stable water supply is essential for producing ultra-pure water used to clean wafers.

The amount of water that must be supplied to the Yongin advanced system semiconductor national industrial complex and general industrial complex is 1.072 million tons a day, and the government plans to invest about KRW 2.2 trillion by 2034 to build related facilities. The first phase includes construction of a dedicated 46.9-km pipeline from Paldang Dam to Yongin, and design work began last year. However, the first supply of 310,000 tons of water a day is not scheduled until 2031.

After an investment decision is made, a long preparation process is needed before actual production can begin, beyond simply building a factory. Accordingly, when large-scale investment plans are drawn up, the schedule for building infrastructure must be calculated at the same time. The article points out that there is a time lag between investment and production, and that preparing infrastructure to bridge that gap is a key variable.

In overseas examples from the semiconductor industry, securing water is managed as part of the production strategy. TSMC has treated drought and water shortages as business interruption risks and has expanded its efforts to secure reclaimed water. As of the end of 2024, more than 67,000 cubic meters of reclaimed water a day was being supplied to its Tainan plant, cutting tap water use at local factories by 31%. This reclaimed water is being applied to 5-nanometer and 3-nanometer processes, and securing water needed to expand production capacity is also being built into the business strategy.

The way infrastructure determines the pace of industrial growth is also visible in AI. As generative AI spreads and large data centers continue to be built, securing electricity has emerged as a core condition for data center construction. The IEA analyzed that grid constraints exist, and said about 20% of the world’s data center capacity planned for construction by 2030 faces the risk of delays in grid connection. The IEA said, in essence, that some of the planned capacity for data centers faces the risk of delayed connections because of power grid constraints.

The recently enacted domestic Special Act on the Promotion of the AI Data Center Industry includes a special provision on power grid impact assessment. This reflects in law the reality that the power grid for data center expansion and operation is inseparable, and in Korea the need to address data center expansion and power grid issues together is reflected in the special provisions of the law.

Ireland provides an earlier example of what happens when power shortages occur. Data centers’ share of Ireland’s total electricity consumption rose from 5% in 2015 to 22% in 2024, and the Commission for Regulation of Utilities (CRU) introduced a new connection policy last year. The policy required facilities that can generate or store electricity equivalent to a data center’s peak demand, while grid operators were instructed to factor spare capacity in the relevant area into their review of data center locations. As a result, the issue of integrating site selection for demand facilities with the capacity of the power grid was brought into focus.

Against this backdrop, it is emphasized that infrastructure for high-tech industries cannot be treated as a follow-up task after an investment decision. By the time a factory or data center is completed, water and electricity must already be secured, and the conditions for planned investment to lead to actual production and services are securing water and power in advance.

There are calls for early alignment of industrial facility schedules and infrastructure schedules. If industrial facility investment and infrastructure supply move separately, even investment plans worth hundreds of trillions can end up as little more than numbers if operations fail to start on time. Accordingly, there is a need to check in advance how far water supply projects have progressed based on the start date of factory construction, and to review at the investment planning stage whether the required transmission network can be secured by the completion date of the data center. It is also emphasized that semiconductor factory construction plans and water supply plans need the same timetable, and AI data center construction plans and power transmission plans need the same timetable.

There are also related tasks such as checking the local supply capacity and the burden of expanding infrastructure. Since factories need electricity before the day they begin operation and production lines need water before the day they start running, the construction schedule and the timing of securing water and power infrastructure must be aligned from the investment planning stage. In the end, the real transformation of massive investment plans into industry is revealed through the state’s ability to execute.

Source: IT DAILY · Kim Byung-joo
Original: https://www.itdaily.kr/news/articleView.html?idxno=241119

References

• https://www.itdaily.kr/news/articleView.html?idxno=241119