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Biden: SKORean chips are a model for deeper ties with Asia

Biden: SKORean chips are a model for deeper ties with Asia

Pyeongtaek, South Korea (AP) – President Joe Biden opened his Asia trip Friday with a tour of a South Korean computer chip factory that will be a model for one in Texas, taking it as an example of how ties with India are deepening. The Pacific can nurture technological innovation and foster vibrant democracies.

“Much of the world’s future will be written here, in the Indo-Pacific, over the next several decades,” Biden said. “This is the moment, in my view, to invest in each other to deepen our business relationships, and to bring our people closer together.”

Biden’s message was geared toward the promise of a better global tomorrow, but it was also aimed at American voters amid political challenges at home — such as hyperinflation driven by a lack of chips — as he tries to show that his administration is making the economy tick.

The Democrat’s first visit to Asia as president came after a poll released Friday by the Public Affairs Research Center – NORC showed Biden’s approval rating in the United States at 39%, the lowest during his presidency. The poll also found that pessimism is deepening about the economy and the situation in the United States – especially among Democrats.

About 2 in 10 American adults said the country is heading in the right direction or described the economy as good, down from about 3 in 10 in April. Among Democrats, only 33% said the country is on the right track, down from 49% last month.

Samsung, which owns the chip factory in South Korea, last November announced its plans to open a $17 billion semiconductor plant in Texas. Last year’s semiconductor shortages hurt the availability of cars, kitchen utensils and other goods, causing soaring inflation around the world and hampering public approval of Biden among American voters. The president noted that the Texas plant would add 3,000 high-tech jobs and that construction would include labor unions.

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“These little chips are the key to propel us into the next era of humankind’s technological development,” Biden said in remarks after touring the factory.

The president seeks to promote greater business cooperation among democracies with overlapping values, and sees it as a way to preserve the benefits of a globalized economy in a way that benefits American workers and increases foreign investment in the United States. He is scheduled to appear Sunday in Seoul with the president of Hyundai Motor Group to highlight the company’s decision to invest in a new electric vehicle and battery manufacturing facility in Savannah, Georgia.

During his five-day visit to South Korea and Japan, Biden makes his argument about how a United States that can work with its closest allies will be stronger at home and abroad. In his remarks Friday, Biden did not mention China, which has emerged as a major competitor to the United States, and stressed the value of alliances that currently exclude this country.

Biden was greeted at the plant by the new president of South Korea, Yoon Seok-yeol, and Samsung Electronics Vice President Lee Jae-young. Yoon is a political newcomer who became president, his first elected office, just this month. He campaigned to take a tougher stance against North Korea and strengthen the 70-year alliance with the United States

Before Biden spoke, Yoon said he hopes the US-South Korea partnership will evolve into an “economic and security alliance based on cooperation in advanced technology and supply chains.”

The chip factory demonstrated some of the unique nature of manufacturing as visitors were required to wear white lab coats and blue socks to help keep the facility clean. Biden and Yoon, who were not wearing protective gear, witnessed a demonstration of the machines.

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At one point during his tour, Biden received an in-depth explanation of the KLA inspection system on the Samsung factory 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 machines, Biden advised him, “Don’t forget to vote” when he returned home to the United States.

In closing, Biden backed down and thanked Moon, who was South Korea’s former president, Moon Jae-in, who held the position for several years before Yoon’s last election. Biden quickly corrected this error.

“President Moon, Yoon, thank you for everything you’ve done so far,” Biden said.

Part of the shortage of computer chips is due to strong demand as much of the world emerges from the coronavirus pandemic. But virus outbreaks and other challenges have also caused the closure of some semiconductor factories. US government officials have estimated that chip production will not be at the levels they would like until early next year.

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

More than 75% of global chip production comes from Asia. This is a potential weakness that the United States hopes to protect against with more domestic production. There is $52 billion in government investment in this sector in a bill being negotiated in Congress.

The threat of Chinese aggression against Taiwan could cut off the flow of advanced computer chips needed in the United States for military equipment as well as consumer goods. Likewise, a tight North Korea is testing ballistic missile launches amid the coronavirus outbreak, a potential risk to South Korea’s manufacturing sector if brinkmanship escalates.

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

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

The White House said in a fact sheet that semiconductor companies reported nearly $80 billion in U.S. investment through 2025. This includes $20 billion for an Intel plant outside Columbus, Ohio, and up to $30 billion by Texas Instruments, It is a $1 billion expansion by New York-based Wolfspeed and investments by Global Foundries and SK Group.

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Writer Darlene Superville for the Associated Press in Washington contributed to this report.