Japan's Miyagi Prefecture lobbies SK Hynix for chip plant amid Seoul's tech leak concerns

Key facts

• Miyagi Prefecture is making a significant effort to attract SK Hynix to build a memory chip plant.
• The prefecture has offered a large site and essential infrastructure upgrades for the proposed plant.
• South Korea's government is hesitant to approve new foreign facilities for SK Hynix due to technology leak concerns.
• The U.S. is also actively trying to attract SK Hynix and Samsung Electronics to build plants within the United States.
• SK Hynix has confirmed it is reviewing options for new production bases to strengthen its memory business.

Miyagi Prefecture in northeastern Japan is making a concerted effort to attract a cutting-edge memory chip plant from South Korea's SK Hynix, offering substantial infrastructure support including a 300,000-square-meter site, upgraded water, and power facilities. Local governments are keen on the large-scale investment to generate employment and boost regional economies.

However, the bid faces significant hurdles. South Korea's government, which designates semiconductors as a national strategic industry, is reportedly wary of approving new foreign facilities due to concerns over advanced technology leakage. This reluctance could impede SK Hynix's plans for overseas production of AI-related chips.

Adding to the complexity, the United States is also actively lobbying SK Hynix and Samsung Electronics to build plants within the U.S., with U.S. Commerce Secretary Howard Lutnick expressing a desire for these companies to invest domestically. SK Hynix has acknowledged it is reviewing various options for additional production bases to enhance its global competitiveness, though no final decisions have been made.

SK Group Chairman Chey Tae-won has previously indicated that Japan, with its developed semiconductor ecosystem, is an attractive candidate for diversification. For Miyagi Governor Yoshihiro Murai, securing the SK Hynix plant is seen as a capstone achievement for his 24-year tenure, especially after a previous attempt by PSMC and SBI Holdings to build a chip plant in the region was withdrawn.