U.S. to Invest in Semiconductors: Good News or a Burden for Samsung?

[경향신문]

President Biden Holds up a Wafer and Stresses Investment in Semiconductors: U.S. President Joe Biden holds up a silicon wafer during a video summit with CEOs of semiconductor manufacturers at the Roosevelt Room in the White House on April 12 (local time). Washington D.C. AP Yonhap News

On April 12 (local time), U.S. President Joe Biden referred to semiconductors as major “infrastructure” and stressed aggressive investments in a virtual meeting at the White House. The business world voiced expectations that Samsung Electronics, which attended the latest meeting, might make a decision to invest in the U.S. soon after receiving direct and indirect pressure from the White House.

This day, President Biden attended a meeting presided by White House National Security Advisor Jake Sullivan and held up a semiconductor wafer and said, “Chips, like the one I have here--these chips, these wafers, are batteries, broadband; it’s all infrastructure” The U.S. president went on to say, “We need to build the infrastructure of today, not repair the one of yesterday,” and added, “We’re going to lead it (the world) again in the 21st century.”

President Biden mentioned that he received letters from 65 senators and House members, bipartisanly, “supporting the CHIPS for America program,” and quoted the letter and said, “The Chinese Communist Party ‘aggressively plans to reorient and dominate the semiconductor supply chain....’” He further said, “China and the rest of the world is not waiting, and there’s no reason why Americans should wait. We’re investing aggressively in areas like semiconductors and batteries.”

He stressed that Americans must understand and establish the supply chain of semiconductors in the U.S. as major infrastructure in response to China.

President Biden’s comments also seemed to urge Congress to pass a US$2.25 trillion (approx. 2.5 quadrillion won) budget on infrastructure presented by his administration last month. This included a $50 billion (approx. 56 trillion won) budget to support semiconductors.

This day’s CEO summit was organized by the White House to listen to the opinions of businesses after damages continued due to a shortage of semiconductor chips: automotive plants temporarily suspended operations and the production of electronics was also interrupted.

Representatives of nineteen companies including the world’s top three semiconductor manufacturers--Samsung Electronics, Intel, and Taiwan’s TSMC--other major semiconductor companies, such as GlobalFoundries, NXP, and Micron Technology; motor companies suffering from a shortage of semiconductor chips, General Motors and Ford; and IT businesses, which are also major semiconductor consumers, such as Alphabet (Google’s parent company) and Hewlett Packard were present in the virtual meeting.

The details of the meeting were not made public. White House spokesperson Jen Psaki said, “This isn’t a meeting where we expect a decision or an announcement to come out of.” Choi Si-young, the president of Samsung Electronics’s foundry business represented the company in the meeting, but Samsung did not disclose the details of the discussion, either. However, due to the nature of the videoconference, experts speculated U.S. automakers and IT companies to have shared their recent problems in securing a supply of semiconductor chips, while semiconductor companies would have presented plans to invest in facilities inside the U.S.

Intel and TSMC recently decided to build foundry facilities in the U.S. This may put pressure on Samsung Electronics, which has yet to decide on investing in the U.S. Samsung has a foundry plant in Austin, Texas and is reviewing plans to invest $17 billion (approx. 20 trillion won) to construct an additional factory. A business insider said, “From Samsung’s position, they probably felt stronger pressure to respond to the White House invitation,” and added, “If the U.S. provides a variety of incentives, it could speed up Samsung’s decision to invest in the U.S.”