The Turbulent Semiconductor Hegemony Battle... Will Samsung Draw the Sword with a Minimum Investment Decision of 50 Trillion Won?

Samsung Electronics Seocho Building, Seocho-gu, Seoul [Image source=Yonhap News]

[Asia Economy Reporter Kim Heung-soon] As the semiconductor industry escalates into diplomatic and security competition among countries, Samsung Electronics is expected to soon finalize an investment plan exceeding at least 50 trillion won to strengthen its global competitiveness.

According to business circles and the semiconductor industry on the 18th, Samsung Electronics is reportedly set to finalize plans to build a foundry (semiconductor contract manufacturing) plant in the United States worth 17 billion dollars (approximately 20 trillion won) soon.

Samsung Electronics has been operating a foundry plant in Austin, Texas, USA, for over 20 years since 1998. It is reviewing additional plant construction near this location as well as in Arizona and New York, negotiating detailed conditions such as tax incentives.

Earlier, on the 12th, Samsung Electronics attended the 'CEO Summit on Semiconductor Supply Chain Recovery' held via video conference at the White House, representing the domestic semiconductor industry as a key global foundry company. At this meeting, U.S. President Joe Biden urged participants to make more aggressive investments to strengthen the semiconductor industry within the United States and secure the U.S. supply chain. Accordingly, the U.S. federal and state governments are expected to expand incentives to encourage foreign companies' investments.

Samsung's competitors, such as Intel and Taiwan's TSMC, have already announced their semiconductor investment plans in the U.S. following the White House meeting. Samsung Electronics also faces the pressure to respond in some way to the 'bill' presented by President Biden. Local U.S. media expect Samsung Electronics to finalize its U.S. investment plan as early as the first half of this year, or by summer at the latest. Some speculate that Samsung's U.S. investment plan could be announced around the late next month, coinciding with the South Korea-U.S. summit between President Moon Jae-in and President Biden.

Separately, Samsung Electronics is also advancing investment plans for the Pyeongtaek Campus 3rd Plant (P3), known as the largest scale ever in South Korea. Pyeongtaek P3 began foundational construction in the second half of last year and is currently undergoing steel frame construction with multiple tower cranes deployed. There are expectations that the exterior construction will be completed within this year. Industry insiders anticipate that the total investment scale of Pyeongtaek P3 will be much larger than P1 and P2, each of which involved investments of about 30 trillion won. Considering this, including the expansion of the U.S. foundry plant, the total investment amount is likely to exceed 50 trillion won.

Samsung Electronics' investment decisions have been delayed since Vice Chairman Lee Jae-yong was sentenced to 2 years and 6 months in prison in the retrial of the 'National Pension Service Scandal' case in January and was incarcerated. A business insider noted, "Maintaining networks with global companies and directing major decision-making inevitably depends on the judgment of the head of the group," pointing out the reason Samsung has not made a decisive move.

However, given that major countries are pouring out support measures to secure semiconductor leadership and investments among competing companies are expanding, the industry believes Samsung Electronics will find it difficult to delay investments indefinitely. After his incarceration, Vice Chairman Lee also urged in his first internal message, "Regardless of my situation, Samsung must continue on its path," emphasizing, "We must keep the promises already made to the public and faithfully fulfill the company's duties of investment and job creation."

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