South Korea was the first stop on US President Joe Biden’s first Asia trip since taking office. In May of last year, he visited Samsung Electronics Co’s new Pyeongtaek Park, which is said to be the world’s largest semiconductor manufacturing plant, where he observed advanced 3-nanometer process chips being made.
Pyeongtaek Park is a model for a new plant Samsung has planned for Texas. It has invested US$17 billion in the project, and is regarded as the major rival to a plant being built by Taiwan Semiconductor Manufacturing Co (TSMC) in Arizona.
Unusually, Japan was not Biden’s first stop, as it has been for other US presidents when making official visits to Asia. When Biden visited Seoul, it was only 10 days after newly elected South Korean President Yoon Suk-yeol took office, so personal ties to the leader could not have been the explanation.
However, Japan does not have any competitive semiconductor technology or production capacity — clearly the reason Tokyo was not the priority this time.
South Korea’s key role in the global semiconductor supply chain has become a major national security asset. It is not only because clashes between the US and China have thoroughly changed geopolitical dynamics, but also because the resilience of the chip supply chain is no less important than dealing with the threat of North Korea’s missile testing program.
South Korean newspaper Chosun Ilbo said that Biden’s visit to the Samsung plant shows that the semiconductor industry is a critical asset that supports the strategic value of the US’ alliance with the country.
This asset could also reduce South Korea’s unilateral reliance on the US for security, and establish a mutually beneficial alliance on an equal footing, it said.
Two months after Biden’s visit, SK Group, the second-largest South Korean corporation after Samsung, sent a delegation to the US. It was led by the conglomerate’s chairman, Chey Tae-won, who also met with Biden in a videoconference to promise a US investment of US$22 billion.
On top of a previous contribution of US$7 billion in electric vehicle batteries, SK Group’s total US investment amounts to US$29 billion, more than half from subsidiary memorychip maker SK Hynix.
To be on par with the SK Group, Samsung Group plans to build 11 chip plants in Texas over the next 20 years with an investment totaling US$200 billion, surpassing Intel Corp’s eight plants.
Seizing the opportunity in semiconductor supply chain restructuring, Samsung and SK are scrambling to take advantage of the US$52 billion subsidy bonus announced by the Biden administration’s CHIPS and Science Act.
In the face of Samsung’s aggressive moves, TSMC is quickening the pace of its plans in the US. The company’s planned 4-nanometer process plant in Arizona is being redesigned to start mass production using 3-nanometer technology in 2026. The investment is increasing to US$40 billion from US$12 billion, and it is expected that more advancements are to follow.
TSMC founder Morris Chang (張忠謀) has often said that TSMC did not succeed at the first try, and it is never easy to sustain its success.
Despite moving some operations overseas, TSMC is likely to find ways to protect its advantages at home. The government and Taiwanese must be optimistic and fully supportive of TSMC’s plans for global growth.
Chen Yung-chang is a company manager.
Translated by Lin Lee-kai
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