"Biden Calls Samsung"... US Sends Love Call and Checks to K-Semiconductor Simultaneously

[Image source=EPA Yonhap News]

[Asia Economy Reporters Hyunjin Jung and Suhwan Kim] The Biden administration in the United States is hosting a meeting on the 12th, inviting semiconductor-related industries including Samsung Electronics. While the apparent reason is to discuss measures related to the ongoing global semiconductor supply shortage, it is expected to ultimately serve as a venue for pressure and persuasion to attract semiconductor production bases within the U.S. It is interpreted that the U.S., emphasizing that the presence of East Asia such as Korea and Taiwan in the global semiconductor supply chain has become a vulnerability, is continuing its efforts to strengthen its domestic semiconductor industry by simultaneously offering incentives and checks to K-semiconductors while building justification for massive support.

According to Bloomberg on the 1st (local time), Jake Sullivan, National Security Advisor, and Brian Deese, Director of the National Economic Council, will invite semiconductor and automobile manufacturers to the White House on the 12th to discuss measures against the semiconductor supply shortage. Among the invitees are Samsung Electronics, U.S. foundry companies such as GlobalFoundries, and U.S. automobile manufacturer GM. A senior White House official stated on the 2nd that the trilateral national security advisors meeting between Korea, the U.S., and Japan held in the U.S. will discuss semiconductors in addition to North Korea issues.

This news comes as part of the Biden administration’s strategy to strengthen its domestic semiconductor industry to reduce the technological gap while attracting semiconductor production bases to the U.S. Recently, Taiwan’s TSMC and U.S. Intel announced investments to build factories in Arizona. Samsung Electronics is also considering new and expanded semiconductor plants in Austin, Texas, Arizona, and New York. In this situation, the U.S. government is expected to increase pressure on Samsung Electronics, which is weighing investments, by offering active incentive policies.

At the same time, the U.S. government is also working to check ‘K-semiconductors’ under the pretext of reducing dependence on East Asia. It points out that East Asia’s geographical vulnerability, being part of the Pacific Ring of Fire, and diplomatic issues such as Korea-Japan conflicts could be potential risks. On this day, the Semiconductor Industry Association (SIA) and Boston Consulting Group (BCG) released a report titled “Strengthening the Global Semiconductor Supply Chain in an Uncertain Era.” The SIA mentioned, "The current global semiconductor supply chain structure based on geographic specialization has created tremendous innovation, productivity, and cost reductions over the past 30 years but has also created vulnerabilities."

SIA and BCG noted that 75% of global semiconductor production capacity is concentrated in China and East Asia, and that the only places capable of advanced fine processes below 10 nanometers (nm; one billionth of a meter), essential for the U.S. economy, national security, and critical infrastructure, are currently Taiwan and Korea. They warned that active seismic activity in China and East Asia and escalating geopolitical tensions could lead to a serious semiconductor supply chain crisis.

In particular, the report cited the Korea-Japan conflict triggered by Japan’s 2019 export restrictions on semiconductor-related parts as an example of escalating geopolitical tensions. The report stated, "The impact of the Korea-Japan conflict could shake the entire global electronics supply chain beyond the semiconductor industry," adding, "Although the Korea-Japan conflict somewhat eased last year, this issue remains sensitive, and unless fundamental problems are resolved, risks to the global semiconductor supply chain will continue."

This content was produced with the assistance of AI translation services.