Why Did a Dutch Semiconductor Company Choose Incheon Airport?

People often say that they didn’t realize just how great Incheon Airport is until they’ve experienced other international airports. They’re not empty words—it’s been proven through data! Incheon Airport has ranked no. 1 in Airports Council International’s Airport Service Quality for thirteen consecutive years.

Incheon Airport is also proud of its cargo services. Incheon Airport has ranked third in handling global air cargo in 2020, functioning as the center of the international cargo network. It also received the Asian Freight Logistics & Supply Chain Awards last year for the sixth consecutive year. Like this, Incheon Airport is not only showing outstanding achievements in commercial flights, but also serving as the backbone for Korea’s trade.

Now, how has Incheon Airport become the world’s leading logistics hub for cargo among all the other powerful competitors? In fact, Incheon Airport went through a lot of trial and error as well as rough competition to get to where it is today. Let’s delve further and find out more about how global companies came to choose Incheon Airport!

Semiconductor company meets airport… ASML & Incheon Airport

Source: ASML website

Back in August 2007, a Dutch multinational semiconductor company by the name of ASML was looking for a hub country that can integrate and operate its existing warehouse. ASML wished to build an international logistics hub center in Korea and form a global distribution hub to deliver its products worldwide.

ASML supplies semiconductor manufacturing equipment to Samsung Electronics and LG Electronics. Asia took up more than 60 percent of ASML’s delivery, being a powerful market in international logistics. Other hub countries ASML considered include Singapore, Hong Kong, Taiwan and China.

First, to establish an international logistics hub center, there must be enough demand within the hub country and the delivery lead time to the next demanding country by air must be as short as possible. Korea was the most adequate country. It had enough demand as it took up 30 percent of ASML’s sales and Incheon Airport had the best airline routes in Asia that had no problem in lead time.

Meanwhile, Incheon Airport had plans to bring in international logistics companies in its free trade zone. However, it was not easy to invite ASML. Customs and corporate tax were a few obstacles that were in the way. In fact, ASML considered Korea as an option for a technical center in 2006, but turned to Taiwan due to Korea’s systematic reasons.

Then, how did Incheon Airport overcome such situation? Incheon Airport eagerly looked for a solution. First, it met with logistic companies as well as Incheon Airport Customs and Korea Customs Service to innovatively revise the cargo management system. It also coordinated with the Ministry of Economy and Finance to have over ten meetings with Cheong Wa Dae, Council on National Competitiveness, and others, to resolve the issue of corporate tax.

With the relentless effort of Incheon Airport, ASML decided to establish its hub center in Incheon Airport’s free trade zone. This was a win-win decision for ASML, Incheon Airport, and other companies. As for ASML, when it had its hub center in Amsterdam in the past, it took 22 hours to deliver its equipment to Tokyo. With the new hub center, the delivery time was reduced to less than six hours. Samsung Electronics also greatly reduced the delivery lead time of semiconductor parts from 21 hours to less than 3 hours.

Incheon Airport also became recognized as a global logistics hub airport. By attracting ASML, it had increased quantity of goods transported by air and attracted more hubs of other semiconductor equipment companies. Thanks to that, Incheon Airport had foreign investor STATS ChipPAC Korea form its semiconductor manufacture plant in the free trading zone in 2012 and successfully held the International Air Logistics Conference in 2014.

Incheon Airport, third in global logistics!

Like this, Incheon Airport became to treat the third most international cargos in the world, becoming renowned as a global logistics airport. As of July 2020, Incheon Airport is connecting 101 cities of 42 countries through 22 airlines for cargo. Incheon Airport’s free trade zone located at the heart of Northeast Asia has formed an international-level business environment through its convenient customs procedures, non-tariff benefits, and various incentives.

This post covered the story behind how Incheon Airport came to become the hub airport of international cargo network. We got to see new aspects of Incheon Airport and how it has been loved by not only international travelers, but also by companies that take charge of the economy. Please look forward to the steps Incheon Airport will take as a leader of the aviation industry being the center of global air travel and logistics!

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