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Samsung chief visits US after complying with Washington request

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Samsung Vice Chairman Lee Jae-yong listens to a reporter's question at Gimpo International Airport in Seoul before his scheduled trip to Canada and the United States, Sunday. Yonhap
Samsung Vice Chairman Lee Jae-yong listens to a reporter's question at Gimpo International Airport in Seoul before his scheduled trip to Canada and the United States, Sunday. Yonhap

By Kim Yoo-chul

Samsung Electronics chief Lee Jae-yong flew to the U.S., Sunday, shortly after partially complying with a data request by the U.S. Department of Commerce to help ease the global semiconductor shortage. Lee will also visit Samsung's research facility in Canada, but spend most of his time in the United States.

The central question is how Lee will respond to the U.S. request for increased semiconductor supply, as Washington officials are anxious to get supply chains moving again. As a result, the U.S. could see an early recovery of its service-driven economy. However, an increased semiconductor supply could drag down Samsung's profits.

The U.S. Department of Commerce is focused on increasing semiconductor production, given the continued lack of products installed with chips, including vehicles and medical equipment. The Samsung chief is set to be briefed over the details of the situation and pressed to explore the best possible ways to work closely with Washington officials to jointly resolve the supply shortage issue, said officials.

Within the context and Washington's sense of urgency to get its manufacturing sector back on normal track, Samsung Electronics is set to finalize its planned $17 billion semiconductor investment plan in the U.S. state of Texas before Lee returns to Korea.

"Samsung's scheduled investment plan in Texas is aimed at ramping up its production of foundry (contract-based) chips. However, because the U.S. government wants to see visible improvement from next year in the semiconductor supply chain, Samsung's soon-to-be-finalized investment plan could include its temporary plans to produce chips vital to the U.S. manufacturing and service industries and an early start of the new factory," a senior executive involved with the matter said by telephone.

U.S. Commerce Secretary Gina Raimondo listens as President Joe Biden speaks during a meeting in the Cabinet Room of the White House, Nov. 12. AP-Yonhap
U.S. Commerce Secretary Gina Raimondo listens as President Joe Biden speaks during a meeting in the Cabinet Room of the White House, Nov. 12. AP-Yonhap

U.S. government officials believe that the shortage is closely related to the COVID-19 pandemic, which directly affected chip production. As a result, Washington wants semiconductor companies to manufacture more chips in the U.S. to make the supply chain more resilient.

Just before his departure to the United States from Seoul's Gimpo International Airport aboard a Korean Air charter flight, Lee did not respond to questions regarding any of his scheduled meetings with U.S. government officials. But he only said he plans to meet "a lot of U.S. partners."

As part of a package that U.S. Joe President Biden is trying to get through Congress to provide billions of dollars in incentives to companies to manufacture semiconductors in the United States, the Samsung chief is expected to check the latest updates in Congress regarding bills affecting Samsung's U.S. business.

On a related note, U.S. Secretary of Commerce Gina Raimondo said while she does not want to invoke the Defense Production Act ― a Cold War-era national security law to force manufacturers to comply ― she will do so if necessary.

At Gimpo airport, Lee told reporters he will meet Moderna representatives in Boston, Massachusetts, during his stay, but did not elaborate further. The U.S. drug maker recently granted approval for Moderna COVID-19 vaccines manufactured by Samsung Biologics to be used on South Korean citizens, as the country steps up efforts to increase booster shots.

Lee was released from prison earlier this year following the country's justice ministry's parole decision. Cheong Wa Dae said his parole was because of his possible expanded role in addressing vaccine and semiconductor shortage issues. Lee is subject to receive approval from the justice ministry when he wants to travel overseas, because his parole conditions include a five-year restriction on certain business activities.




Kim Yoo-chul yckim@koreatimes.co.kr


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