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Biden's visit to Samsung chip plant to boost tech alliance: experts

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Samsung Electronics' semicondcutor plant in Pyeongtaek, Gyeonggi Province / Courtesy of Samsung Electronics
Samsung Electronics' semicondcutor plant in Pyeongtaek, Gyeonggi Province / Courtesy of Samsung Electronics

By Baek Byung-yeul

U.S. President Joe Biden is expected to tour Samsung Electronics' semiconductor manufacturing plant in Pyeongtaek, south of Seoul, with President Yoon Suk-yeol on the first day of his official visit to Korea on Friday, a move designed to enhance the technology alliance between the two countries, according to industry experts, Thursday.

The American president starting his visit to Korea with a tour of the world's largest chip-making plant shows the U.S.' willingness to forge closer economic ties with Asia's fourth-largest economy by creating a new global supply chain for semiconductors and other high-tech components independently from China, the experts added.

"Korea has already announced its intention to participate in the Indo-Pacific Economic Framework (IPEF), a trade pact led by the U.S. It is certain that more and more chips will be used in various fields in the future, and from that point of view, the U.S. president seems to seek to solidify the partnership with Korea by visiting Samsung's plant as the company produces 70 percent of the memory chips in the world," Kim Dae-jong, a professor of business administration at Sejong University, said.

To counter China's growing influence, the U.S. government confirmed that the IPEF will be launched during Biden's trip to Asia. The IPEF is aimed at reinforcing cooperation between the U.S. and its allies in the Indo-Pacific region in various fields such as supply chain networks. Korea is one of the countries that has revealed its intention to join the economic framework along with Japan, Australia, New Zealand, Singapore and the Philippines.

"The U.S. president's visit to the Samsung plant is interpreted as a move to strengthen cooperation between Samsung and the U.S. and grow together," Kim added.

After experiencing supply chain disruptions caused by semiconductor shortages during the last one or two years, Biden has shown great interest in the U.S. regaining control of the chip manufacturing business, which the country handed over to Korea, Taiwan, Japan and China due to rising labor costs.

He also invited Samsung's executives to the White House for a series of meetings on chip supply chains. In response, Samsung announced in November 2021 that it would invest $17 billion to build a new semiconductor fabrication plant, or foundry, in Taylor, Texas.

Samsung's Pyeongtaek plant is the largest chip-manufacturing factory in the world. The plant was built in 2015 on a 2.89-million-square-meter site, which is similar in size to 400 football fields combined.

The Pyeongtaek plant's first assembly line began full-fledged operations in June 2017 and line two in 2020. Currently, Samsung is preparing for the full operation of a third line within this year, while a fourth one is under construction.

Another expert said Biden could pressure Samsung to invest more in the U.S., which is pushing hard to decouple with China, which has become the world's factory.

"President Biden wants to run a supply chain network centered on the U.S. In that sense, I think the U.S. president is visiting Samsung's Korean plant in order to ask the chipmaker to increase its investment in his country," Kim Yang-paeng, a senior researcher at the Korea Institute for Industrial Economics and Trade (KIET), said.

"It is not known whether Biden will ask Samsung to build a foundry factory or a memory chip factory when he asks for more investments. However, it would be unreasonable to ask for a new memory factory because producing memory chips there would be a bad move for Samsung in terms of controlling production costs. As the U.S. is trying to increase chip production on its home soil, I think it will be a foundry factory," the researcher added.

Lee Jae-yong, vice chairman of Samsung Electronics and the head of the country's largest conglomerate, is expected to guide the leaders of Korea and the U.S. in person during the visit.

Regarding the U.S. president's visit to its plant, a Samsung spokesman said, "There's nothing to comment on."

Baek Byung-yeul

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