US President Joe Biden yesterday opened his trip to Asia with a focus on the US tech sector, touring a Samsung Electronics Co computer chip plant in South Korea that is to serve as model for a US$17 billion semiconductor factory that the electronics company is building outside Austin, Texas.
The visit is also a nod to one of Biden’s key domestic priorities of increasing the supply of chips. A semiconductor shortage last year hurt the availability of automobiles, kitchen appliances and other goods.
Previewing the trip aboard Air Force One, US National Security Adviser Jake Sullivan said that Samsung’s investment in Texas would mean “good-paying jobs for Americans and, very importantly, it will mean more supply chain resilience.”
Greeting Biden at the plant in Pyeongtaek was South Korean President Yoon Suk-yeol and Samsung Electronics vice chairman Jay Y. Lee.
Part of the chip shortage is the result of strong demand as much of the world emerged from the COVID-19 pandemic, but virus outbreaks and other challenges also caused the closure of semiconductor plants.
US government officials have estimated that chip production would not be at the levels they would like until early next year.
Global chip sales totaled US$151.7 billion during the first three months of this year, a 23 percent jump from the same period last year, Semiconductor Industry Association data showed.
More than 75 percent of global chip production comes from Asia. That is a possible vulnerability that the US hopes to protect against through more domestic production and government investment in the sector through a bill being negotiated in the US Congress.
The risk of Chinese aggression against Taiwan could possibly cut off the flow of high-end computer chips that are needed in the US for military equipment as well as consumer goods.
Similarly, North Korea has been test-firing ballistic missiles amid a COVID-19 outbreak, a possible risk to South Korea’s manufacturing sector should the brinksmanship escalate.
In terms of chip production, China leads the global market with a 24 percent share, followed by Taiwan (21 percent), South Korea (19 percent) and Japan (13 percent). Only 10 percent of chips are made in the US, Semiconductor Industry Association data showed.
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