Why are South Korean firms building multibillion dollar semiconductor plants in the U.S.?
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South Korea's second largest tech company SK Group pledged an additional 22 billion U.S. dollars to expand semiconductor production along with other high tech sectors in America.
This came during a rare video call between the group's chief Chey Tae-won and U.S. President Joe Biden last week, and just a day before the U.S. Congress passed a 280 billion dollar CHIPS and Science bill that includes more than 52 billion for computer chips.
Samsung, a week before the announcement, also happened to mention it may pledge billions more to build 11 additional factories in Texas.
We discuss the significance of these South Korean firms investing massively into America - what are the costs and opportunities?
We discuss this with YANG Hee-dong, Professor of Business Administration, Ewha Womans University and Dr. J.R. Reagan / CEO, IdeaXplorer.
1) Professor Yang: What do you think makes the SK investment of $22 billion in the U.S. so significant at this point?
2) Dr. Reagan:The U.S. congress finally passed the CHIPS act on Thursday. What opportunities lie ahead for Samsung and SK hynix?
3) Professor Yang: What makes the U.S. an attractive production base for South Korean companies, given the higher labour costs on top of the multibillion dollar investments made?
4) Professor Yang: Do the massive investments in America make strategic sense for South Korean chipmakers at the risk of offending China, where they produce much of their DRAM chips?
5) Dr. Reagan: Would the U.S. guarantee better market access, or any benefits in return for Samsung and SK's massive investments?
6 ) Dr. Reagan: What strengths do South Korean chip companies have, and how can they further build their leverage?
7) Professor Yang: Do you think the South Korea government will join the Chip 4 alliance?
8) Dr. Reagan: What will the Chip 4 alliance look like when it materialises, and what would South Korea's role be?
YANG Hee-dong, Professor of Business Administration, Ewha Womans University and Dr. J.R. Reagan / CEO, IdeaXplorer. Thank you for your time today.