Visited Samsung Semiconductor Factory and Discussed Samsung SDI Battery Joint Venture
Key to 2025 US Tariff-Free System... Must Accelerate Local Mass Production Setup
After his inauguration, U.S. President Joe Biden, visiting South Korea for the first time, shakes hands with Samsung Electronics Vice Chairman Lee Jae-yong after delivering a speech following an inspection of the Samsung Electronics semiconductor plant in Pyeongtaek, Gyeonggi Province on the afternoon of the 20th. (Photo by Yonhap News)
[Asia Economy Reporter Moon Chaeseok] U.S. President Joe Biden drew attention by visiting Samsung Electronics' semiconductor plant in Pyeongtaek, Gyeonggi Province, and mentioning Samsung's joint venture (JV) project in the United States. He referred to the electric vehicle battery joint venture project that Samsung SDI is promoting with Stellantis, the world's fourth-largest automaker. This has attracted even more interest as it comes at a time when there are criticisms that Samsung's investment in the U.S. battery sector has been relatively delayed.
On the 20th, President Biden mentioned Samsung SDI's JV project on his first day in Korea. After inspecting Samsung Electronics' Pyeongtaek campus with President Yoon Suk-yeol and Samsung Electronics Vice Chairman Lee Jae-yong, he expressed gratitude for Samsung Electronics' $17 billion (approximately 21 trillion KRW) semiconductor investment in the U.S. during a speech and referred to Samsung's joint venture in the U.S. He said, "I understand that Samsung is working with our Department of Commerce to establish a JV for battery production, specifically electric vehicle battery production," adding, "(This) is necessary for the economic growth, energy security, and climate goals of both countries."
Samsung SDI and Stellantis signed a memorandum of understanding (MOU) last October to build an electric vehicle battery cell and module production plant in the U.S. with an annual capacity of 23 GWh (gigawatt-hours). The joint venture plans to start mass production in the first half of 2025. Stellantis is an automaker formed last year by the merger of Fiat Chrysler Automobiles (FCA) and PSA Group. It owns 14 car brands including Fiat, Chrysler, Peugeot, Jeep, and Maserati.
The batteries produced by the joint venture will be supplied to Stellantis factories in the U.S., Canada, and Mexico and will be installed in next-generation electric vehicles under Stellantis' brands, ranging from plug-in hybrid electric vehicles (PHEVs) to pure electric vehicles (EVs). However, specific details such as the investment scale, the name of the joint venture, location, and construction start date have not yet been disclosed. Industry interest centers on whether a mass production system can be established by "no later than 2025." This is because the United States-Mexico-Canada Agreement (USMCA) requires that more than 75% of parts used in vehicles exported from the U.S. must be produced domestically to maintain existing "tariff-free" benefits. This is why President Biden's specific mention of the JV project has attracted attention.
During President Biden's visit to Korea, the "Korea-U.S. technology alliance" emerged as a key topic. In this context, Biden's mention of the battery joint venture with Samsung is interpreted as emphasizing technological cooperation in future technologies such as semiconductors and batteries. Especially from Biden's perspective, who is accelerating the transition to electric vehicles, collaboration with Korean battery companies, which rank second globally after China in the global battery market dominated by Chinese companies, is crucial. This U.S. recognition aligns with the judgment of domestic battery companies. Among the world's three major electric vehicle battery markets?North America, Europe, and China?China dominates the domestic market, making it urgent to quickly secure market share in the U.S. to achieve economies of scale. Samsung SDI is currently in the process of selecting a site in the U.S.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
