Biden embarks on Asia trip with global issues and tech on the agenda

PYEONGTAEK, South Korea — President Joe Biden opens his trip to Asia with a focus on the computer chip shortage that has plagued the global economy, visiting a Samsung computer chip factory that will serve as a model for a semi -drivers of the $17 billion Korean electronics company plans to open in Texas.

Friday’s visit is a nod to one of Biden’s top national priorities of increasing the supply of computer chips. A shortage of semiconductors last year hurt the availability of automobiles, kitchen appliances and other goods, driving up inflation around the world and crippling public approval for Biden among US voters. .

Biden will grapple with a host of foreign policy issues during a five-day visit to South Korea and Japan, but he’s also crafted an itinerary clearly intended to address the concerns of his domestic audience as well.

Previewing the trip aboard Air Force One, White House national security adviser Jake Sullivan said Samsung’s investment in Texas would mean “well-paying jobs for Americans and, which is very important, it will mean greater supply chain resilience.”

Welcoming Biden to the factory in South Korea will be the country’s new president, Yoon Suk Yeol, and Samsung Electronics vice president Lee Jae-yong. Yoon is a political newcomer who became president, his first elected office, just over a week ago. He campaigned to take a tougher stance against North Korea and strengthen the 70-year-old alliance with the United States.

Part of the computer chip shortage is the result of strong demand as much of the world has emerged from the coronavirus pandemic. But coronavirus outbreaks and other challenges have also caused semiconductor factories to shut down. US government officials estimated that chip production would not reach the levels they would like until early 2023.

Global computer chip sales totaled $151.7 billion in the first three months of this year, a 23% jump from the same period in 2021, according to the Semiconductor Industry Association.

More than 75% of the world’s chip production comes from Asia. It’s a possible vulnerability that the United States hopes to hedge against with increased domestic production and $52 billion in public investment in the sector through a bill currently being negotiated in Congress.

The risk of Chinese aggression against Taiwan could eventually cut off the flow of high-end computer chips needed in the United States for military equipment as well as consumer goods. Likewise, hermetic North Korea has been testing ballistic missiles amid a coronavirus outbreak, a possible risk to South Korea’s manufacturing sector if the tightrope is escalated.

In terms of chip production, China leads the world with a 24% share, followed by Taiwan (21%), South Korea (19%) and Japan (13%). According to the Semiconductor Industry Association, only 10% of chips are made in the United States.

Samsung announced the Taylor, Texas factory in November 2021. It hopes to begin operations in the second half of 2024. The South Korean electronics giant chose the site based on a number of factors , including government incentives and the “readiness and stability” of local infrastructure.

The White House said in a fact sheet released Friday that semiconductor companies have announced nearly $80 billion in U.S. investments through 2025. That sum includes $20 billion for the fab. Intel outside of Columbus, Ohio, up to $30 billion from Texas Instruments, a $1 trillion expansion by Wolfspeed in North Carolina, and investments from Global Foundries and SK Group.

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