Maeil Business Newspaper reported on August 20 that the final Enforcement Decree for the Special Act on Strengthening and Supporting the Semiconductor Industry deleted draft language that would have limited semiconductor-cluster creation plans to areas outside the Seoul metropolitan region. The National Law Information Center confirms that the decree, Presidential Decree No. 36564, took effect on August 11, 2026.
For Samsung’s customers, competitors and enterprise buyers dependent on memory and foundry supply, the practical signal is that South Korea is trying to remove two different constraints around its most concentrated chip-manufacturing region: eligibility for government-backed cluster programs and physical factory capacity. Neither effort, however, is finished.
The metropolitan-area bar did not survive the final decree
The initially proposed restriction was consequential precisely because Gyeonggi contains South Korea’s largest concentration of semiconductor production and R&D. Samsung’s Pyeongtaek and Hwaseong operations, SK hynix’s Icheon base, and the major Yongin projects are all in the greater Seoul region. A rule excluding the metropolitan area would therefore have created a semiconductor policy that sidelined much of the country’s existing manufacturing core.
That was not an accidental reading of vague draft language. In June, Maeil Business Newspaper reported that the Ministry of Trade, Industry and Energy’s draft enforcement decree specifically limited cluster-plan approval to regions outside the metropolitan area. Gyeonggi, Pyeongtaek, Yongin, Hwaseong, Icheon and other local governments objected that the restriction went beyond the practical geography of Korea’s chip industry.
The final version is a retreat from that proposed bright-line exclusion. The Asia Business Daily reported in July that the government had already removed the metropolitan-area disqualification during the legislative-notice process, then softened a proposed preference for non-metropolitan projects into “priority consideration.” In other words, projects outside the capital region retain a policy advantage, but Gyeonggi is no longer barred at the application gate.
The distinction is important. Gyeonggi has gained eligibility, not an award. The province says it will begin a policy study with the Gyeonggi Research Institute and prepare a cluster-creation plan linking its major chip hubs. It has not announced a completed application, a designation decision, a defined subsidy package, or a timetable for receiving support.
That leaves meaningful discretion with the central government. The final policy still directs decision-makers to consider non-metropolitan regions first, a compromise meant to preserve the national government’s regional-development agenda while avoiding exclusion of the country’s established fabs. The result is less a blanket victory for Gyeonggi than a return to a contest in which location will be one factor among infrastructure, industrial capability, investment readiness and national policy.
Samsung’s Pyeongtaek expansion rests on a different exemption
The immediate industrial consequence may be more tangible at Samsung Electronics’ Pyeongtaek Campus, where Gyeonggi is reviewing a proposed increase in the floor-area ratio for the A1-1 industrial site from 350% to 490%. That proposal is the mechanism that could change the shape of P5-1 and P5-2, the two fabs under construction with a reported 2030 completion target.
Yonhap News Agency reported on August 19 that Samsung plans to construct the P5 buildings with three floors rather than two if the change is approved. A two-story fab is described as having room for four production cleanrooms; a three-story design could accommodate six. On that simple physical comparison, Pyeongtaek City estimates roughly 1.5 times the production capacity from the same site footprint.
But the 1.5-times figure is a capacity estimate, not a Samsung production forecast. It does not tell buyers which process nodes will occupy the added cleanroom space, whether the space will be equipped immediately, what wafer starts Samsung will target, or how much of the facility will be allocated to DRAM, NAND, HBM-related capacity, foundry work or other production. A cleanroom shell and an operating semiconductor line are separated by years of tool procurement, utility work, process qualification and demand-driven capital spending.
Samsung has also not publicly detailed the final configuration of P5-1 and P5-2 in the reporting reviewed here. The three-floor plan should therefore be treated as the project direction embedded in the industrial-complex change request, not as a guaranteed final fab layout.
Crucially, the floor-area-ratio request is not dependent on Gyeonggi first winning semiconductor-cluster designation under the new law. Yonhap and SBS both tie the proposed 350%-to-490% increase to Pyeongtaek’s earlier designation as a national high-tech strategic industry specialized complex in July 2023. That designation allows a floor-area-ratio exception of up to 1.4 times the usual level. The math is direct: 350% multiplied by 1.4 equals 490%.
The policy change now being reported is therefore an acceleration of an existing Pyeongtaek entitlement, rather than a fresh concession made under the August 2026 Semiconductor Special Act.
The approval timetable remains the project’s real near-term gate
Pyeongtaek City submitted the industrial-complex plan amendment to Gyeonggi Province, which is reviewing it before the Ministry of Land, Infrastructure and Transport’s industrial-location policy deliberation. Yonhap reports that city officials expect ministry review in October and completion in November if no unusual issue arises.
That is an administrative target, not a permit in hand. The plan can still be delayed or revised during provincial review or the national deliberation. The submitted reporting does not identify whether utility capacity, wastewater treatment, transport, environmental review or construction sequencing present unresolved constraints for the three-story configuration.
Those omissions matter more than they might for an ordinary commercial building. A larger fab is not simply additional floor space. More cleanrooms create greater demand for reliable electricity, ultra-pure water, gas delivery, chemical management, abatement and wastewater treatment. South Korea’s semiconductor policy has increasingly acknowledged that cluster support is as much about shared infrastructure and permit coordination as it is about attracting fab commitments. Adding floor area may make P5 denser, but it does not by itself create the power and utility headroom to run it.
Samsung’s Pyeongtaek campus already spans roughly 3.9 million square meters in Godeok-dong and has three operating fabs, according to Yonhap. That installed base gives P5 advantages that greenfield projects lack: an established industrial campus, operational experience and existing supply-chain proximity. It also means the expansion will add load to a site that is already a major industrial consumer rather than starting from an empty tract.
What the policy reversal changes for the chip supply chain
For PC makers, server vendors and enterprise IT departments, the immediate effect is indirect. There is no new Samsung product, no announced wafer allocation and no revised pricing schedule attached to either decision. The significance is in the supply-side options being preserved for the latter part of the decade.
Pyeongtaek is one of Samsung’s critical manufacturing locations for memory and logic ambitions. If the 490% floor-area ratio is approved and the additional cleanroom capacity is equipped, Samsung would have a route to grow output without expanding the A1-1 land parcel. That can reduce one form of expansion friction in a sector where new fabs take years and cost billions of dollars.
At the provincial level, ending the metropolitan exclusion allows Gyeonggi to seek cluster status for a connected industrial proposition rather than treating Pyeongtaek, Yongin, Hwaseong and Icheon as mature assets outside a new national support structure. A successful designation could matter for shared infrastructure, tenant support, research links and permitting coordination. Yet the province has not published the operational boundaries of its proposed cluster, the companies expected to participate, or the infrastructure commitments it would seek.
That missing detail makes it premature to call this a new Gyeonggi “mega-cluster” in any meaningful delivery sense. The province has regained the right to make its case. It has not demonstrated what it will build, how it will pay for it, or which projects will receive support ahead of others.
November is the date to watch, not the end of the buildout
The next concrete milestone is the expected Ministry of Land, Infrastructure and Transport review of the Pyeongtaek industrial-complex amendment in October, followed by a possible November conclusion. Approval would give Samsung the land-use basis to pursue the taller P5 design; it would not mean six new cleanrooms are immediately producing chips.
Gyeonggi’s separate cluster plan will take longer. The new decree has removed the disqualifying metropolitan-area clause, but it preserves an advantage for projects outside the Seoul region and leaves the designation process to future applications and government decisions. For now, the useful conclusion is narrower: South Korea has reopened a policy channel for its existing semiconductor heartland, while Samsung waits for a distinct permit that could determine how much P5 capacity can fit on the ground it already controls.