U.S. chip summit highlights Samsung's strategic ambiguity

In attending a meeting next week at the White House, Samsung Electronics is carefully balancing interests as the United States pushes for more semiconductor production and China remains the largest buyer of chips from the Korean company.

Samsung Electronics' chip plant in Austin [SAMSUNG ELECTRONICS]

In attending a meeting next week at the White House, Samsung Electronics is carefully balancing interests as the United States pushes for more semiconductor production and China remains the largest buyer of chips from the Korean company.

The April 12 meeting, which has not been confirmed by the company or the U.S. administration but has been widely reported, will include major chip makers and automakers and top security and economic advisers to President Joe Biden.

According to unsourced reports by Bloomberg, Reuters and others, General Motors, GlobalFoundries and Intel have been invited and U.S. National Security Adviser Jake Sullivan and National Economic Council director Brian Deese will be hosting the summit.

Kim Ki-nam, Samsung Electronics CEO, is reported to be attending. Samsung Electronics is the world’s largest memory chip maker and No.2 in foundry, after TSMC. No other Korea companies have been invited, according to the reports.

The U.S. president is not expected to be at the meeting.

With chips scarce and some automakers shutting lines as a result, the shortage of semiconductors has become a geopolitical issue. The problem was on the agenda during recent talks in Annapolis, Maryland, between the U.S. national security adviser and those of Japan and Korea.

Industry insiders expect the U.S. officials to ramp up pressure for another round of investment into building chip fabrication plants in the U.S.

“It is almost certain that Samsung will build a new foundry plant in the U.S., most possibly in Austin, Texas,” said a source in the semiconductor industry. “The U.S. could raise the need to establish more new production lines in the U.S during the meeting.”

Samsung requested about $1 billion of tax breaks from Travis County, the city of Austin and the Manor school district for 20 years for the building of a $17 billion factory next to the existing factory in Austin.

China made its own diplomatic gesture as Foreign Minister Wang Yi advocated the strengthening of ties in chips as well as other technologies in talks with counterpart Chung Eui-yong last week.

Wang was reported to have said that the two countries should focus on bolstering cooperation in fields such as 5G, big data, the green economy, artificial intelligence, integrated circuits and new energy "to forge a partnership of high-quality cooperation."

Samsung operates a memory-chip plant in Xi’an, China, and plans to further expand production capacity there.

As Samsung is walking a fine line between the two nations, some experts said that the Korean government should play a more active role in mediating.

“For both the U.S. and China, the government is taking the lead, but Samsung is largely responding on its own,” said Kim Seung-joo, a professor at Korea University’s Graduate School of Information Study.

“The Korean government needs to take steps to arrange things when a local company is placed in a tricky position amid tensions between the U.S. and China,” Kim added.

BY PARK EUN-JEE, PARK HYNG-SOO [park.eunjee@joongang.co.kr]