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By Nam Hyun-woo
A move by large business groups to invest in the United States is picking up speed as the nation's trade feud with Japan has become another downside for doing business here, according to company officials Tuesday.
They said Korea's top conglomerates have been expanding their investments in the U.S. as an effective way out from the fallout of the Washington-Beijing trade conflict and domestic issues including increasing labor costs and spats with unions. Such movements will pick up momentum as Japan's trade restrictions against Korea are expected to be a long-term setback to their business.
Samsung Electronics is investing $1.5 billion for the expansion of its semiconductor plant in Austin, Texas. Samsung plans to finish the expansion of the foundry by next year, as part of its attempts to diversify its business portfolio to expand its non-memory chip lineup.
The company is reportedly doing feasibility studies on expanding its foundry business in the U.S. in a bid to avoid Japan's export curbs on three core materials needed for making semiconductors.
"Since the company's chip plants in Korea and China are feeling the impact of the Korea-Japan and U.S.-China trade conflict, the U.S. has become the safest place, because Japan is unlikely to put restrictions on semiconductor materials heading to the U.S.," an industry official said.
Also, it is reported that Samsung is considering more investments such as setting up additional home appliance manufacturing facilities in the U.S., following its washer plant in South Carolina which opened last year. The company said it is not considering additional investments.
Hyundai Motor plans to invest 586.6 billion won for its U.S. manufacturing body, Hyundai Motor Manufacturing Alabama, by the end of this year and has already poured in 118.7 billion won in the first quarter. The budget is more than double last year's 286.9 billion won the company invested in the U.S..
SK and LG are also increasing their bets on the U.S.
LG Chem said it is considering expanding its electric vehicle battery output in the U.S. through building an additional battery plant in the U.S.
SK Innovation has already decided to build a new battery plant in the U.S. by pouring in 1.9 trillion won by 2025. SK Group is also eyeing multiple opportunities in energy businesses.
"The increasing labor costs and friction with unions have led to a lowering of Korea's attractiveness as their manufacturing base," the official said. "In the meantime, they found the U.S. a place safe from trade friction between the U.S. and China, and even Korea and Japan. The recent increase in conglomerates' investments in the U.S. shows that."
