Biden Opens Asia Trip 05/20 06:03
President Joe Biden on Friday opened his Asia trip by highlighting the
computer chip shortage that has bedeviled the world economy, touring a Samsung
computer chip plant that will serve as model for a $17 billion semiconductor
factory the Korean electronics company plans to open in Texas.
PYEONGTAEK, South Korea (AP) -- President Joe Biden on Friday opened his
Asia trip by highlighting the computer chip shortage that has bedeviled the
world economy, touring a Samsung computer chip plant that will serve as model
for a $17 billion semiconductor factory the Korean electronics company plans to
open in Texas.
The Samsung visit was a nod to one of Biden's key domestic priorities:
increasing the supply of computer chips. A semiconductor shortage last year
hurt the availability of autos, kitchen appliances and other goods, causing
higher inflation worldwide and crippling Biden's public approval among U.S.
Biden will grapple with a multitude of foreign policy issues during a
five-day visit to South Korea and Japan, but he also crafted an itinerary
clearly meant to tend to the concerns of his home audience as well. The
president noted that the Texas plant would add 3,000 jobs and the construction
would include union labor.
"These little chips," Biden said in remarks at the plant, "are the key to
propelling us into the next era of humanity's technological development."
Greeting Biden at the plant in South Korea was the country's new president,
Yoon Suk Yeol, and Samsung Electronics Vice Chairman Lee Jae-yong. Yoon is a
political newcomer who became president, his first elected office, slightly
more than a week ago. He campaigned on taking a tougher stance against North
Korea and strengthening the 70-year alliance with the U.S.
Yoon said in a speech before Biden spoke that he hopes the countries'
partnership evolves into an "economic and security alliance based on
cooperation in advanced technology and supply chains."
The chip plant showed the unique nature of manufacturing as visitors were
required to don laboratory coats and blue booties to help keep the facility
clean. Biden and Yoon, who did not wear protective clothing, saw a
demonstration of the machinery.
At one point during his tour, Biden received an in-depth explanation of a
KLA inspection system on the Samsung plant floor. The California-based company
is a major supplier to Samsung's semiconductor operations. After a worker named
Peter explained the ins and outs of the machinery, Biden quipped, "Don't forget
to vote," when he returns home to the United States.
Part of the computer chip shortage is the result of strong demand as much of
the world emerged from the coronavirus pandemic. But coronavirus outbreaks and
other challenges also caused the closure of semiconductor plants. U.S.
government officials have estimated that chip production will not be at the
levels they would like until early 2023.
Global computer chip sales totaled $151.7 billion during 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 global chip production comes from Asia. That's a possible
vulnerability the U.S. hopes to protect against through more domestic
production and $52 billion worth of government investment in the sector through
a bill being negotiated in Congress.
The risk of Chinese aggression against Taiwan could possibly cut off the
flow of high-end computer chips that are needed in the U.S. for military gear
as well as consumer goods. Similarly, the hermetic North Korea has been
test-firing ballistic missiles amid a coronavirus outbreak, a possible risk to
South Korea's manufacturing sector should the brinksmanship escalate.
In terms of chip production, China leads the global pack with a 24% share,
followed by Taiwan (21%), South Korea (19%) and Japan (13%). Only 10% of chips
are made in the U.S., according to the Semiconductor Industry Association.
Samsung announced the plant in Taylor, Texas 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 issued Friday that semiconductor
companies have announced nearly $80 billion in U.S. investments through 2025.
That sum includes $20 billion for Intel's plant outside Columbus, Ohio, up to
$30 billion by Texas Instruments, a $1 trillion expansion by Wolfspeed in North
Carolina and investments by Global Foundries and SK Group.