'Hyundai Motor-SK On US Joint Venture Plant Officialized' Attention... Yoon Accompanied by Heads of 4 Major Groups, US Market Inspection

The heads of the four major conglomerates?Lee Jae-yong, Choi Tae-won, Chung Eui-sun, and Koo Kwang-mo?who are accompanying President Yoon Suk-yeol on his state visit to the United States are expected to focus their efforts on minimizing the damage to Korean companies regarding U.S. semiconductor support laws and the Inflation Reduction Act (IRA) subsidy issues.

The photo shows the heads of the five major conglomerates attending the Korea-Japan Business Roundtable last March.
[Image source=Yonhap News]

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On the 24th, the business community anticipates that Lee Jae-yong, Chairman of Samsung Electronics, will have the longest U.S. business trip among the heads of the four major conglomerates. Due to weekly court appearances, Lee had limited freedom for overseas trips, but this time, accompanying President Yoon on his visit to the U.S. has provided him with an opportunity to stay abroad for an extended period. There are no court dates scheduled until the 26th of next month.

Samsung Electronics is investing $17 billion to build a foundry (semiconductor contract manufacturing) plant in Taylor City. During his visit to the U.S., Lee faces the task of assisting the government in mitigating the semiconductor law’s toxic clauses included in the subsidy application requirements, such as ▲allowing access to semiconductor facilities, ▲sharing excess profits, ▲submitting detailed accounting data, and ▲restrictions on expanding factories in China, to reduce the semiconductor industry's damage as much as possible.

Also, Lee, who is known for his broad overseas network to the extent that he once said, "The more friends, the better," regarding corporate cooperation, may hold meetings with CEOs of related companies to expand Samsung Electronics’ U.S. business in future growth sectors such as bio and advanced IT. In the past, whenever he visited the U.S., Lee met with representatives of American IT and big tech companies like Apple, Google, and Verizon to discuss business cooperation.

Choi Tae-won, Chairman of SK Group, which has business sectors intertwined with U.S. interests such as semiconductors and batteries, is also expected to meet with political and business figures in the U.S. to seek adjustments to related laws and systems concerning advanced industry policies. He is also expected to review the progress of large-scale investments in semiconductors and batteries, as well as the global supply chain. In particular, in the battery sector, he is likely to prioritize cooperation with automobile manufacturers, as collaboration between battery companies and automakers has become a crucial issue following the implementation of the IRA. SK On and Hyundai Motor plan to invest about 3 trillion won to build a joint factory with an annual capacity of 25GWh, and it is highly likely that this plan will be formalized during this U.S. visit. SK On Vice Chairman Choi Jae-won will also accompany Chairman Choi.

Chung Eui-sun, Chairman of Hyundai Motor Group, will travel to the U.S. with key executives including Hyundai Motor President Jang Jae-hoon. This is not only for the economic delegation schedule but also to directly oversee Hyundai Motor and Kia’s local business, which has emerged as their largest market. The electric vehicle plant under construction in Georgia aims to complete ahead of the initially planned first half of 2025. They will also check the trends in the increasingly competitive electric vehicle market. Recently, with the finalization of the IRA detailed guidelines, Hyundai Motor and Kia’s electric vehicles were ultimately excluded from the $7,500 tax credit. Although the Genesis GV70 is produced locally, it does not qualify for subsidies due to not meeting battery material standards. They may also consider adding more electric vehicles produced at the currently operating North American and Mexico plants.

Meanwhile, among the heads of the four major conglomerates, Koo Kwang-mo, Chairman of LG Group, is expected to be the most at ease during this U.S. trip. Chairman Koo, who departed for the U.S. on this day and participated in the economic delegation schedule, is expected to return directly to Korea without visiting other regions once President Yoon’s state visit schedule concludes. The battery sector is considered to benefit more than suffer from the IRA implementation. LG Chem and LG Energy Solution are anticipating benefits from IRA subsidies. Since Chairman Koo visited LG Chem’s Cheongju anode material plant before the U.S. visit to inspect the battery supply chain, he is also expected to focus on inspecting and confirming the battery and material supply chains in the U.S.

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