44 Trillion KRW US Investment by Korean Companies on Occasion of Korea-US Summit, 20 Trillion KRW for New Foundry Plant Expansion Plan
On the morning of the 21st (local time), U.S. Secretary of Commerce Gina Raimondo attended and spoke at the Korea-U.S. Business Roundtable event held at the U.S. Department of Commerce in Washington. [Image source=Yonhap News]
[Asia Economy Reporter Kim Heung-soon] Following the South Korea-US summit, South Korea's four major conglomerates announced plans to invest over 40 trillion won in the United States, with Samsung Electronics pledging the largest single investment of 20 trillion won. The US administration also expressed a welcoming message regarding Samsung's decision.
Gina Raimondo, US Secretary of Commerce, stated during her closing remarks at the Korea-US Business Roundtable held at the US Department of Commerce on the morning of the 21st (local time), "Semiconductors remain the core foundation of all industrial sectors, and overcoming the vulnerabilities in the semiconductor supply chain is currently the most important task." She especially expressed her welcome for Samsung Electronics' investment. Secretary Raimondo also mentioned, "We will actively support incentives included in the US semiconductor support legislation to encourage investments by Korean companies." This statement was conveyed through a local briefing by Moon Seung-wook, Minister of Trade, Industry and Energy, who is currently visiting the US.
Samsung, Hyundai Motor, SK, and LG, the four major domestic conglomerates, announced plans to invest $39.4 billion (approximately 44 trillion won) in the US in key sectors such as semiconductors, batteries, and electric vehicles during this summit. Among these, Samsung Electronics promised to invest a total of $17 billion (approximately 20 trillion won) to build a new foundry (semiconductor contract manufacturing) plant, marking the largest investment amount. This is the largest single investment in Samsung Electronics' history. Previously, Samsung invested about 12 trillion won in the Xi'an 1 plant in China in 2012 and about 8 trillion won in the Xi'an 2 plant in 2017.
The location for Samsung Electronics' new foundry plant in the US has not yet been decided. Negotiations regarding tax incentives and other benefits with state governments are ongoing. Although Texas, where Samsung already operates a foundry plant in Austin, is considered a strong candidate for the new plant, Samsung has stated that "no decision has been made."
Kim Ki-nam, Vice Chairman of the Device Solutions (DS) division overseeing Samsung Electronics' semiconductor business, said at the business roundtable, "With the recent acceleration of digitalization, semiconductor demand is increasing, and future industries such as 5G and artificial intelligence cannot develop without semiconductors." He requested "active support and significant interest from the US government to strengthen the Korea-US semiconductor supply chain." He added, "Since we are planning a new foundry investment worth $17 billion, good and concrete news will be shared soon," and "Through this, we will contribute to the economies of both countries."
Meanwhile, Hyundai Motor plans to invest $7.4 billion (approximately 8.3 trillion won) by 2025 in future mobility sectors, including electric vehicle production and expansion of charging infrastructure in the US. LG Energy Solution and SK Innovation are pushing forward with local joint ventures or independent investments totaling about $14 billion (approximately 16 trillion won). SK Hynix will also invest $1 billion (1.1 trillion won) to establish a large-scale research and development (R&D) center in Silicon Valley for innovation in new growth areas.
US President Joe Biden, after concluding the Korea-US summit, expressed his gratitude to the Korean companies present by saying, "Thank you to the Korean companies that have pledged $40 billion in investment in the United States."
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