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| Samsung Electronics' semiconductor plant in Pyeongtaek, Gyeonggi Province / Courtesy of Samsung Electronics |
By Baek Byung-yeul
The White House will hold a meeting with global companies, including Samsung Electronics, on Tuesday morning (KST) to discuss the ongoing global semiconductor shortage issue.
Given the fact that industry officials and analysts are expecting the Biden administration to demand a reorganization of the chip industry, centered on the U.S., the focus is moving to whether the Korean tech giant will decide to intensify its investments in the U.S.
Samsung, the world's largest memory chip maker and second-largest foundry company, could be asked to increase its investment. Samsung is planning to expand its foundry production lines by possibly injecting $17 billion in Austin, Texas, where its contract-based chip-manufacturing line is located.
It is reported that Samsung requested authorities in Texas to grant tax incentives for a period of over 20 years, which would be worth around $805.5 million, for its new $17 billion chip factory. However, the company has yet to confirm this report.
Samsung did confirm that it will join the virtual summit along with other big name companies such as Intel, Micron Technology, TSMC, Google, AT&T, General Motors, Ford and NXP, but added, "There will be nothing for us to say about the meeting, as everything related to the White House meeting will be announced through the presidential office."
Samsung's investment decision could be accelerated after reviewing the specifics of the meeting, said sources familiar with the issue, Monday. They cited the recently settled battery dispute case between LG Energy Solution (LGES) and SK Innovation (SKI), in which President Biden is believed to have played a behind-the-scenes mediator role.
The two Korean electric vehicle battery makers said Sunday they reached a settlement on the dispute over claims that SKI misappropriated LGES' trade secrets. The settlement came a day before the deadline for Biden's veto of the U.S. International Trade Commission's (USITC) decision to ban SKI from importing batteries or related components into the U.S.
SKI is known to have requested Biden to veto the USITC's decision, as the company's ongoing battery plant construction in the U.S. state of Georgia could have become unraveled. However, if the U.S. president were considering the scale of SKI's developments, he would also need to take into account the fact that LGES has also built its battery plant in the U.S. with General Motors, and promised large-scale local investments to capitalize on the fast-growing EV market there.
It is hard to know whether the U.S. president directly ordered LG and SK to settle their disputes, though Biden seems to have played a mediator role between the Korean firms. Successful negotiation of the matter would clearly spell a major win for his green economy drive, which aims to create more jobs by nurturing eco-friendly business. This sentiment was confirmed by a statement released by the White House after the settlement announcement, in which Biden said, "This settlement agreement is a win for American workers and the American auto industry."
"A key part of my plan to Build Back Better is to have the electric vehicles and batteries of the future built here in America, all across America, by American workers… Today's settlement is a positive step in that direction, which will bring some welcome relief to workers in Georgia and new opportunities for workers across the country," he noted.
As seen in the LG-SK case, semiconductor industry officials here said the Samsung will likely be offered an opportunity to increase its investment.
While the business environment is rapidly changing and business leaders are being urged to draw on collective company wisdom, Samsung has been mired in corruption charges against its vice chairman as well as the group's leader Lee Jae-yong being back behind bars.
At this time when the leader needs to decide the direction of the group and make investment decisions necessary for the company's future, Lee was sentenced to two and a half years in prison by the Seoul High Court in January, in a retrial of a bribery case involving former President Park Geun-hye.
Regarding the Samsung leader, a senior presidential aide told reporters Monday that the presidential office plans to have a meeting with Samsung officials to discuss the chip shortage issue. "We are not going to go see Lee in prison, but as far as I know, officials from the presidential office are going to meet Samsung officials regarding the semiconductor issue," the senior aide said.
