“Honam Semiconductor Cluster: A Historic National Reparations.”.

• “It seems they originally intended to finalize everything in Yongin,” he said, adding, “They either guided or, more harshly, lured them into making large-scale investments in Honam.” He explained, “There was no suppression or coercion.”
• These were Lee Jae-myung’s remarks at a national report session in Gwangju. He emphasized, “This is a historic and national reparation for Honam, which endured discrimination and hardship while building and defending South Korea’s democracy.”
• He also stated, “I really want to show everyone that we are serious.”
• “While it’s true that Honam has received a relatively large amount of investment, compared to the historically accumulated investment levels, it’s merely a drop in the ocean,” he stressed.
• In an editorial, Kyunghyang Shinmun criticized, “It is utterly anachronistic to label the government’s industrial policy decisions as state-controlled.” “As the free trade system declines and the era of economic security emerges, will the People Power Party ignore the global trend where states commonly design industrial ecosystems for strategic industries?”
• Related Link.
• Related Link.

Judiciary Committee Chair Seo Young-kyo.

• Despite the People Power Party’s insistence on securing the Judiciary Committee chairmanship, the Democratic Party unilaterally elected chairs for all 11 standing committees. In the second-half session, the Democratic Party will lead 11 of 18 standing committees, with the opposition holding the remaining 7.
• Seo Young-kyo (Democratic Party lawmaker) continues as Judiciary Committee chair.
• Budget and Accounts Special Committee chair goes to Lee Gwang-jae (Democratic Party lawmaker),
• Operations Committee chair to Han Byung-do (Democratic Party floor leader).
• Cho Jung-sik (National Assembly Speaker) stated, “No citizen believes the National Assembly should stop working until a consensus is reached.”
• Han Byung-do remarked, “We’ve endured enough,” adding, “Starting tomorrow, we will immediately convene standing committees and launch a legislative battle.”
• Chosun Ilbo analyzed, “The goal is to cancel Lee Jae-myung’s trial.” Jang Dong-hyeok (People Power Party leader) criticized, “They aim to establish a special prosecutor to cancel the trial.”

Confrontation Over Cooperation.

• Though the majority’s power prevailed, it has become difficult to avoid criticism that political acumen was lacking.
• The Hankyoreh criticized in an editorial, “Both the ruling party, which failed to demonstrate political skill, and the opposition, which offered no alternatives and only pushed hardline stances, cannot escape blame.”
• The Kyunghyang Shinmun condemned in an editorial, “The People Power Party’s storming out of the plenary hall was also irresponsible.”
• The Chosun Ilbo noted in an editorial, “Even if consensus was unlikely, it is regrettable that they could not at least show a willingness to compromise over a few more days,” adding, “The ruling party’s impatience and harshness stand out.”
• Related Link.
• Related Link.

The Judiciary Committee Is the Problem.

• The Judiciary Committee functions as the Senate in South Korea’s National Assembly. Though it was once customary for the opposition to hold the chairmanship, no formal principle exists.
• The Hankyoreh proposed two solutions in an editorial.
• First, a principle could be established where the ruling party holds the Judiciary Committee chairmanship regardless of seat count. Second, the legislative function of reviewing bills from other standing committees could be separated from the Judiciary Committee’s responsibilities.

What Matters Now.

Han Suk-jung’s Appointment: Second Female Prime Minister in History.

• She assumes office today—the first since Han Myeong-sook (former Prime Minister) in 2006.
• The appointment motion passed with 166 votes in favor out of 167, as the People Power Party boycotted.
• Han Suk-jung (Prime Minister) previously served as CEO of Naver and Minister of SMEs and Startups. The Blue House assessed, “Amid a national strategic overhaul facing AI innovation and global compound crises, she is the right person to lead collective growth and safeguard people’s livelihoods.”

“The Prime Minister Who Saved Citizens’ Lives.”.

• Lee Jae-myung (President) called Kim Min-seok (Prime Minister), nearing retirement, and said, “Our government has achieved many accomplishments, but the Prime Minister’s role was the most significant.”
• The Chosun Ilbo assessed, “It once again showed where his ‘consideration’ lies.”
• The phrase “the Prime Minister who saved citizens’ lives” refers to the significant reduction in suicide rates during Kim Min-seok’s tenure.
• Did suicide rates really drop? South Korea remains the OECD country with the highest suicide rate. The number of suicides decreased from 14,439 in 2024 to 13,774, but it is hard to attribute this to Kim Min-seok’s influence. Monthly figures once exceeded 1,300 but fell to 933 in February this year. In March and April, they rose again to 1,145 and 1,061. More time is needed to observe the trend.
• Related Link.

The Democratic Party’s Succession War.

• Song Young-gil (former Democratic Party leader) claimed, “When Roh Moo-hyun (former president) pushed for the Korea-U.S. FTA, most Democratic Party lawmakers opposed it—but Rep. Jung Chung-rae (Democratic Party leader) was at the forefront.”
• Jung Chung-rae stated, “I have never uttered the word ‘legitimate’ in this context, nor do I intend to,” and proposed, “Let’s end this futile debate over legitimacy.” Park Ji-won (Democratic Party lawmaker) pointed out, “If we dig up graves, we’ll all die.”
• The so-called 2002 “Hudanhyup incident”—when Kim Min-seok abandoned Roh Moo-hyun during the presidential election and joined Jung Mong-joon’s (independent candidate) camp—is also being revisited.
• The Hankyoreh criticized in an editorial, “It’s pathetic that they’re engaging in a legitimacy debate fit only for a monarchy.”
• Song Young-gil apologized for his earlier remark that “Jung Chung-rae turned his back on Roh Moo-hyun and didn’t even attend his funeral.”
• Related Link.
• Related Link.

Deep Dive.

Can 20 More Nuclear Reactors Be Built?

• Currently, 26 operational nuclear reactors generate 26GW, but an additional 27.7GW will be needed by 2040. Chosun Ilbo’s analysis suggests 20 more 1.4GW-class new reactors are required.
• Chosun Ilbo pointed out, “The U.S. and Taiwan determine factory locations based on power availability, secure long-term supply contracts, and build transmission grids before proceeding.”
• Jeon Young-hyun (Samsung Electronics Vice Chairman) urged, “Expand nuclear power to compensate for renewable intermittency, actively pursue PPAs (direct purchases), and allow LNG and combined heat-power projects.”
• Some argue AI data centers are more urgent than semiconductors. Immediate power security of 8.4GW is needed by 2029 to operate them.
• According to JP Morgan, over 60% of U.S. data center projects—targeting completion next year—have yet to break ground due to power supply issues. While data centers take 12–18 months to build, securing stable grid and transmission infrastructure requires 5–7 years.
• The Hankook Ilbo analyzed, “Reviving the Hanbit Unit 1 (expired) and Unit 2 (nearing expiry) has become more likely.” Backlash is strong. The ‘Honam Region Joint Action Against Hanbit Nuclear Plant’ stated, “There’s already surplus renewable energy unused in the capital region—no need to maintain nuclear power.”
• Related Link.

The Issue Is Speed.

• Yang Seung-hoon (Professor at Kyungnam University) assessed, “Since the 1970s heavy and chemical industrialization drive, this is the first time an industrial policy of such scale has been proposed while simultaneously breaking away from the Seoul-Busan axis.”
• The issue is speed. The Yongin semiconductor cluster took six years just to break ground. Projections suggest land development will not finish until 2031.
• The government claims fast-track measures like exempting preliminary feasibility reviews could shorten the timeline to around five years, but critics call this unrealistic.
• Lee Heon-seok (Policy Committee Member at Energy Justice Action) pointed out, “Even in the U.S., data centers sparked widespread opposition due to their massive power and water consumption, vibrations, and noise.” Employment impact is also limited—one data center employs only 100–200 people.
• Related Link.
• Related Link.

“Memory Special? A Gradual Downturn Starting in 2029.”.

• UBS forecasts this. Supply shortages will persist until the first half of 2028, but what comes after is uncertain.
• An industry insider met by JoongAng Ilbo said, “If a downturn begins after facility construction, companies must absorb annual depreciation costs exceeding tens of billions of won.”
• Some analyses suggest supply shortages will last at least three years. The Dong-A Ilbo cited JP Morgan data, projecting a monthly shortage of 450,000 wafers by 2028—equivalent to 10.7 billion 8GB chips. Since a single fab produces 70,000–80,000 wafers monthly, 5–6 fabs would be needed to fill the gap.
• Two variables complicate predictions: first, the pursuit by Chinese competitors like CXMT, and second, how long the AI supercycle endures. Neither is easy to forecast.
• Related Link.
• Related Link.

650,000-Ton Water Project.

• It plans to pool surplus capacity from five dams.
• 300,000 tons will be drawn by raising the height of Dongbok Dam, with 50,000 tons from Juam Dam, 100,000 tons from Jangheung Dam, 100,000 tons from Boseonggang Dam, and 100,000 tons from Naju Dam.
• Cho Won-cheol (Yonsei University professor) noted, “Surplus dam capacity is a safety buffer left for flood control and drought response. Diverting it all to semiconductor plants could be dangerous in extreme climate scenarios.”
• Related Link.
• Related Link.

Cities Young People Are Fleeing.

• Last year, Gwangju saw a net outflow of 7,081 young people. The net outflow rate was 2.5%, ranking first among metropolitan cities—double that of Daegu (1.2%).
• Youth unemployment rates were 8.7% and 7.1%, respectively, compared to the national average of 6.1%.
• Businesses with over 1,000 employees numbered 17 in Gwangju and 10 in South Jeolla, while Daejeon and South Chungcheong had 27 and 26, respectively.
• Monthly average wages in Gwangju were 3.53 million won, ranking 15th among 17 metropolitan regions. South Jeolla fared slightly better at 3.79 million won (10th).
• Yesterday, the Jeonnam-Gwangju Special Self-Governing Province was launched, to be called Gwangju Special Self-Governing Province for short. With a population of 3.17 million and a GRDP of 159 trillion won, it now ranks third after Gyeonggi (651 trillion won) and Seoul (575 trillion won).
• Kim Seong-hee (Professor at Korea University) argued, “Regional talent development programs must be activated, and mandatory hiring quotas expanded.”
• Related Link.

Another Take.

Triple Regulation on Dongtan, Giheung, and Guri.

• Critics call it an eight-month delay. Price increases from February to April were 11.4%, 6.2%, and 7.9%, respectively.
• The Ministry of Land, Infrastructure and Transport belatedly designated these areas as adjustment target zones and speculative overheating districts. Gyeonggi Province designated them as land transaction permit zones.
• Loan-to-value ratios for home loans drop from 70% to 40% for non-homeowners and are completely blocked for homeowners. Multiple homeowners face heavier transfer and acquisition taxes. A mandatory two-year residency requirement bans gap investments.
• Chosun Ilbo’s editorial noted, “This is no different from the government admitting its policy failure,” adding, “Suspicions arise that it neglected the price surge ahead of local elections.”
• Yoo Sun-jong (professor at Konkuk University Graduate School of Real Estate) warned, “A chain reaction of balloon effects is highly likely.” He analyzed that buying momentum will shift to Suwon, Namyangju, Anyang, and other areas.
• Ham Young-jin (head of Woori Bank’s Real Estate Research Lab) pointed out, “Transaction volumes are likely to drop noticeably.”
• JoongAng Ilbo’s editorial urged, “While these measures may temporarily cool overheating, the government must urgently demonstrate through action that real supply is the true solution.”
• Related Link.

Baekjae High Baseball Team to Forfeit Remaining Games?

• Gwangju Jeil High School failed to participate in the 1980 Cheongryonggi Baseball Tournament.
• The Kyunghyang Shinmun pointed out, “The tragedy experienced by seniors was reproduced on the field 46 years later as ‘mocking language’ directed at juniors.”
• The Kyunghyang Shinmun’s front-page headline read, “Hate Turned into Play, Overrunning the Classroom.”
• The mockery—“Go to Starbucks”—directed at students for being from Gwangju shows no lessons were learned from the Starbucks Tank Day controversy.
• The Seoul Metropolitan Office of Education issued a statement: “Historical pain should not be caricatured, nor should specific regions be mocked.”
• In its apology, Baekjae High minimized the incident as the work of “some students.”
• The Baekjae School Alumni Association urged, “The principal must resign, taking moral and managerial responsibility.”
• In a January survey by the Korean Teachers and Education Workers’ Union, 80.2% responded “frequently” when asked if they had witnessed students using far-right hate speech in schools and classrooms.
• In an editorial, The Hankyoreh noted, “Discrimination and hate easily escalate into violence and become weapons that destroy communities.”
• Related Link.
• Related Link.

Resign, Ahn Chang-ho: Senior Officials Return Posts.

• Six senior administrative staff declared they would return their posts.
• Ahn Chang-ho (Human Rights Commission Chairperson), a former public security prosecutor, faces criticism for undermining the commission’s independence.
• He openly opposed homosexuality and made remarks like, “Women don’t get promoted because they’re incompetent, not due to a glass ceiling.” He also sparked controversy by passing a recommendation to “guarantee Yoon Suk-yeol’s (former president) right to defense.” Appointed in September 2024, his term ends in September next year.
• Kwon Hyuk-jang (Human Rights Commission Planning and Finance Officer) criticized, “This place, which should be the last bastion of human rights, has become an outpost for human rights regression.”
• Ahn Chang-ho merely responded, “I’ve taken note of the expressions of opinion.”
• Related Link.
• Related Link.

National Pension Service Rebalancing Begins Today.

• Equity weightings must be adjusted. The temporary extension until the end of June has expired. Immediate sales of 50 trillion won in stocks are now required.
• The National Pension Service’s target domestic equity allocation is 20.8%, which can reach 28.8% with strategic + tactical asset adjustments—but current holdings already approach 30%.
• Foreign selling continues. Foreigners’ net sales totaled 49 trillion won in June alone, with cumulative net sales reaching 149 trillion won through June.
• Lee Eun-tack (KB Securities analyst) explained, “Rebalancing isn’t selling due to poor market outlooks but a mechanical adjustment to reduce overvalued assets and restore preset weightings.”

Won Hits 1,549.4 Against Dollar.

• The highest level since 2009.
• The yen’s decline is steeper. The yen-dollar rate fell to 162.4 yen—the lowest since December 1986.
• Forecasts dominate that the super-weak yen will persist for the time being.

The Fix.

One-Week Parental Leave Now Available.

• Short-term parental leave is being introduced. It can be used once a year in 1- or 2-week blocks when short-term care is needed for children under 8 due to illness, school breaks, etc. Parental leave pay will naturally be provided.
• Many changes are coming in the second half of the year. The foreign exchange market will operate 24 hours without interruption on weekdays.
• In August, a KTX+SRT integrated app will launch. Currently, tickets can be booked one month in advance—this will extend to two months.
• Scalping will be completely banned. Fines of up to 50 times the illegal profit will be imposed regardless of macro use.
• Related Link.

ICYMI.

JoongAng Ilbo Selling Its Management Rights.

• It is a choice to overcome liquidity crisis and finalize workout proceedings. The plan is to secure 66.4 billion won in liquidity by selling real estate and subsidiaries.
• JoongAng Ilbo’s largest shareholder is JoongAng Holdings, which holds 64.7%. Hong Suk-hyun (JoongAng Holdings Chairman) holds 15.6%, and CJ Olive Networks holds 9.2%.
• A creditor committee member met by The Hankyoreh said, “Among several affiliates, only JoongAng Ilbo is a sellable asset, so it seems to have been included in the self-rescue plan.”

Exoskeletons for the Brain.

• After a few thrilling experiences of zipping up steep hills on an electric bike, regular pedal bikes start to feel cumbersome.
• The same applies to exoskeletons for the elderly. While they may help those with significant muscle loss, they could also lead to disuse of even the remaining functional muscles.
• A study of 27,000 Chinese students found that while AI use improved homework scores, it significantly lowered exam performance.
• Seara O’Connor (Financial Times columnist) noted, “You cannot think critically about what you do not know.” AI may build muscle but also risk making it entirely redundant. While AI might seem to enhance capabilities, once it’s removed, little to no retained knowledge often remains.
• The solution? Administer exams without AI. Just as chess players must compete without AI in actual matches, even if they train with it.
• Related Link.
• Related Link.

Facial Recognition Required for Smartphone Activation.

• Making it harder to create burner phones.
• According to the National Police Agency, 20,000 cases of burner phones were detected last year, with voice phishing damages reaching 1.3 trillion won.
• Choi Woo-hyuk (Director of Information Protection Networks) explained, “Facial data is encrypted, stored for 0.04 seconds, then immediately deleted.”

Worth Reading.

Government Speaks in Indicatives, Business in Subjunctives.

• Government and business speak differently. Kang Hoon-sik (Chief of Staff to the President) said, “We will aim to complete it by June 2030.” That means finishing it within the term.
• A corporate official met by Ko Jeong-ae (Central Sunday Editor-in-Chief) had a slightly different take: “We also needed a ‘post-Yongin’ plan, but if they provide support that radical and create the conditions, we might consider moving.”
• The government insists on pursuing both Yongin and Honam in parallel, but businesses seem to be saying, “First Yongin, then what?” Ko emphasized, “Bridging that gap depends on the ruling party’s will, capability, and luck.”
• As with many things, announcements are the easiest part. The critique is that during implementation, they’ll have to “risk changing the soul of the Democratic Party.”
• Related Link.

AI Inc. Republic of Korea’s Dangerous Future.

• Kim Byung-kwon (Director of the Green Transition Institute) pointed out, “Mesmerized by astronomical figures and non-capital region investments, we’ve lost the sense of balance public policy should maintain.”
• First, relying on semiconductors for the nation’s economic lifeline is extremely reckless.
• Second, depending entirely on corporations leaves social side effects of investments at the mercy of corporate goodwill.
• Third, there is absolutely no consideration for climate and the environment.
• Related Link.

Honam Semiconductors: Two Essentials.

• One semiconductor fab requires 8,000 engineering personnel. Yang Seung-hoon (Professor at Kyungnam University) emphasized, “The semiconductor industry is a game-changer unlike heavy industries where research labs and production bases are separated.” The message is clear: “We must stake our survival on the war for talent.”
• First, consistent investment in regional talent is essential. Over 10,000 personnel must be trained through partnerships with local universities, and living conditions must be established. Education, research, startup opportunities, and business support must follow.
• Second, robust governance must be built from groundbreaking to operation. Coordinating interests and establishing transparent decision-making structures is also mandatory.
• Yang Seung-hoon stressed, “Caution must match anticipation.”
• Related Link.