Biden to spotlight US chip production – in South Korea

SEOUL, South Korea (AP) — President Joe Biden will open his Asia trip with a focus on the U.S. tech sector, visiting a Samsung computer chip factory on Friday that will serve as a model for a 17-year-old semiconductor factory. billion that the Korean electronics company is building outside of Austin, Texas.

The visit is also a nod to one of Biden’s top national priorities of increasing the supply of computer chips. A shortage of semiconductors last year hurt the availability of automobiles, kitchen appliances and other goods. This supply crisis caused higher inflation that crippled public approval for Biden and caused his administration to focus on increasing domestic manufacturing.

Biden will grapple with a host of foreign policy issues during his six-day visit to South Korea and Japan, but he’s also crafted an itinerary clearly intended to address the concerns of his domestic audience as well.

Previewing the trip aboard Air Force One, White House national security adviser Jake Sullivan said Samsung’s investment in Texas would mean “well-paying jobs for Americans and, which is very important, it will mean greater supply chain resilience.”

Welcoming Biden to the factory in South Korea will be the country’s new president, Yoon Suk Yeol, and Samsung Electronics vice president, Lee Jae-yong. Yoon is a political newcomer who became president, his first elected term, just over a week ago. He campaigned to take a tougher stance against North Korea and strengthen the 70-year-old alliance with the United States.

Part of the computer chip shortage is the result of strong demand as much of the world has emerged from the coronavirus pandemic. But coronavirus outbreaks and other challenges have also caused semiconductor factories to shut down. US government officials estimated that chip production would not reach the levels they would like until early 2023.

Global computer chip sales totaled $151.7 billion in the first three months of this year, a 23% jump from the same period in 2021, according to the Semiconductor Industry Association.

More than 75% of the world’s chip production comes from Asia. It’s a possible vulnerability that the United States hopes to protect against by increasing domestic production and public investment in the sector through a bill currently being negotiated in Congress.

The risk of Chinese aggression against Taiwan could eventually cut off the flow of high-end computer chips needed in the United States for military equipment as well as consumer goods. Likewise, hermetic North Korea has been testing ballistic missiles amid a coronavirus outbreak, a possible risk to South Korea’s manufacturing sector if the tightrope is escalated.

In terms of chip production, China leads the world with a 24% share, followed by Taiwan (21%), South Korea (19%) and Japan (13%). According to the Semiconductor Industry Association, only 10% of chips are made in the United States.

Samsung announced the Texas-based factory in November last year. It hopes to begin operations in the second half of 2024. The South Korean electronics giant chose the site based on a number of factors, including government incentives and the “readiness and stability” of local infrastructure.

Besides Samsung, Biden also highlighted in his recent speeches the announcement by the American firm Intel to build a semiconductor factory near Columbus, Ohio.

Copyright 2022 The Associated Press. All rights reserved.