SEOUL, April 13 (Korea Bizwire) — Samsung Electronics Co., the world’s largest memory chip producer, is likely to accelerate its investment in the United States as U.S. President Joe Biden urged more spending in the chipmaking sector to resolve the chip shortage and build up a stable supply chain, analysts here said Tuesday.
Samsung was one of the 19 global firms and the only South Korean company that attended the White House’s virtual meeting on Monday (local time) where Biden stressed a need to invest in the semiconductor industry and secure the country’s supply chain.
“Chips, like the one I have here, these chips, these wafers…batteries, broadband, it’s all infrastructure,” Biden said in the virtual meeting, holding up a wafer. “So, look, we need to build the infrastructure of today and not repair the one of yesterday.”
With the White House meeting, Samsung may be under pressure to confirm the construction of a new chip manufacturing plant in the world’s largest economy.
Samsung, the world’s No. 2 foundry firm, is reportedly seeking to build a new US$17 billion chip facility in the U.S., in addition to its foundry factory in Austin, Texas.
Its move came after Taiwan Semiconductor Manufacturing Company (TSMC), the world’s top foundry firm, last year announced that it will build a $12 billion plant in Arizona.
Although Texas has been seen as the most likely place for its new chip fab, Samsung has said it is also assessing other U.S. states, including Arizona and New York, for the possible investment.
“It is expected that the U.S. will offer various incentives, including tax benefits, to Samsung and will induce the company to make foundry investment,” Kim Dong-won, an analyst at KB Securities, said.
“The new plant is projected to focus on making chips with 5-nanometer or below process, which means that the U.S. will have production lines of both Samsung and TSMC that dominate advanced process technology in the foundry sector from 2023 and will be able to establish a stable semiconductor supply chain with American firms.”
Biden is pushing for his $2 trillion infrastructure plan, which includes $50 billion for the semiconductor manufacturing and research.
Industry observers said Samsung’s semiconductor business could suffer a side blow from competition between the U.S and China in the long term.
More than 25 percent of Samsung’s sales came from China last year. The company also runs a memory chip plant in Xi’an, northwest China, and a chip packaging facility in Suzhou, southeastern China.
“China may also request Samsung to make investments for its semiconductor supply chain,” an official from the chip industry said on condition of anonymity.
“We are seeing a global chip shortage now, but after U.S. and China call for aggressive investment in semiconductors, oversupply problem could emerge in the future and if it happens, Samsung would have to take that burden, too.”