[Epoch Times October 1, 2021](Interviews by Epoch Times reporters Xu Yiyang and Li Jinbai) South Korea’s Samsung Electronics plans to build a new chip factory in the United States. Currently, Tyler, Williamson County, Texas has become a strong candidate. A senior South Korean economic researcher said that this will be Samsung’s best investment.
In the global chip shortage, the White House recently met with automakers and chip companies again and asked them to take the lead in helping resolve the crisis. On September 23, the companies participating in the White House talks included the three major automakers in Detroit, Apple, Daimler, BMW, Micron, Microsoft, South Korea’s Samsung, TSMC, Intel, and Ampere Computing.
The US government requires semiconductor companies to provide information such as inventory, orders, and sales. The White House said in a statement after the meeting that the goal is to “understand and quantify possible bottlenecks.” Secretary of Commerce Gina Raimondo (Gina Raimondo) asked business leaders to respond to requests for voluntary information within the next 45 days.
In the early days of the CCP virus (coronavirus) pandemic, demand for cars fell, causing many chip makers to shift their production to computers and tablets whose demand soared. Since then, the shortage of semiconductor chips has forced the world‘s top automakers to cut production.
The White House meeting is the latest in a series of summits on this issue. In April and May of this year, US President Biden and Secretary of Commerce Raymondo have met with some large company executives and senior industry leaders. South Korea’s Samsung Electronics also attended these two meetings.
Samsung plans to build a new chip factory in Texas
Earlier this year, Samsung said it would spend $17 billion to build a new chip factory in the United States. In May of this year, when South Korean President Moon Jae-in and US President Biden held a summit meeting, Samsung had stated that it would build a second foundry production line in the United States, but the relevant details and project timetable were shelved.
Currently, Tyler, Williamson County, Texas, USA is becoming a strong candidate. But Samsung denied the relevant reports. Samsung said on September 6 that with regard to the location of Samsung Electronics’ new semiconductor factories, they are studying specific content such as incentive schemes and administrative support schemes proposed by cities and states in the United States.
Although Samsung denied this, according to the Korean English newspaper The Korea Times, in order to support Samsung Austin Semiconductor’s selection of the city as the location of the new factory, Williamson County and Taylor City held meetings with Samsung. At this meeting, the Taylor City Council authorized the city’s Mayor Brandt Rydell (Brandt Rydell) to implement the “tax cut agreement, development agreement, and development review service reimbursement agreement.”
Although Samsung emphasized that this meeting does not mean that they have reached an agreement with Williamson County and Taylor City on the new factory, investors and market observers speculate that Samsung will soon determine the location of the new factory in Taylor City.
On September 8, local time, Williamson County and the City of Taylor unanimously voted to pass a plan: If Samsung can establish a chip factory in the city by January 2026 and provide 1,800 permanent jobs, then the city plans A 92.5% tax refund will be provided in the first 10 years, a 90% tax refund in the second 10 years, and an 85% tax refund in the third 10 years.
Samsung Electronics already operates a chip foundry in Austin. In February of this year, a cold wave broke out in Texas, interrupting the operation of the Austin plant and causing economic losses. In order to deal with infrastructure-related risks, Samsung had to develop outside of Austin.
Senior Economic Researcher: Samsung’s best investment
Taekyu Lee, a senior researcher at the Korea Economic Research Institute, said in an interview with The Epoch Times reporter on September 28 that this investment will be the best investment Samsung has made.
Li Taikui said that for Samsung, the city of Taylor is listed as a candidate for the new plant. Judging from the tax preferential policies proposed by the city, Samsung has better conditions for investment negotiations. He believes that current conditions are Samsung’s best choice.
He said that Samsung’s current situation is connected with the semiconductor supply and demand situation in the United States. Semiconductors are now in short supply, and the semiconductor industry has become more important. If the supply and demand are insufficient, the industry will be hit, so the United States will feel uneasy.
“The United States did not need the state to adjust its industrial policies from the 1980s to the 1990s, but now it is completely the opposite. The United States also fully invests in the semiconductor field and provides tax incentives to the battery industry.” Li Taikui said.
Li Taikui believes that the era of national-level interests, namely corporate-level interests, has arrived. From an economic perspective that was not available in the past, all countries are now implementing industrial policies, and economic power has become an important means of observing national interests. Therefore, Samsung’s investment decision must also safeguard the interests of the country and enterprises.
He said: “From Samsung’s point of view, it is best if the country and the government do the same. If the government says we can’t do it, the economic response is that in the United States, Samsung will lose the opportunity to sell semiconductors. In such a situation, the era of commonality at the national and corporate levels had arrived. Therefore, Samsung invested in the United States in order to protect the interests of the country and the company at the same time.”
He believes that South Korea should continue to have a win-win situation and cooperation with the United States. He said: “American companies are very young, and Japan’s future is bleak because companies are too old. Therefore, a considerable part of the U.S. economy will dominate in the future because companies continue to grow and grow through continuous innovation, and companies are young. , Full of vitality. So I think South Korea should also continue to invest in the United States.”
The CCP is totally unable to realize the nationalization of semiconductors
The Sino-US trade war, the virus pandemic, and the deterioration of US-China relations are forcing multinational companies to reorganize. Fortune 500 companies have shifted their production and supply chains from China to other regions, including South Korea’s Samsung. This time Samsung will invest in the United States. If South Korea and the United States work together, will the CCP exert pressure?
In this regard, Li Taikui believes that people are overly worried about the pressure from the CCP. He said that judging from the THAAD incident in the past, the CCP has retaliated and imposed sanctions on South Korean Lotte and other companies. However, from the perspective of South Korea’s overall export situation, there is not much difference. If the CCP cracks down on South Korea’s semiconductor industry, the CCP itself will also be hit hard. The CCP will not be able to ban South Korean semiconductor imports.
“This is the most fatal weakness of China (the CCP), and although China (the CCP) says that it will realize the nationalization of semiconductors by 2023, it will not reach the current level at all.” Li Taikui said.
He said: “Semiconductor is a very complex industry, and it is not easy to reach the current stage of Korean semiconductor technology. Therefore, for China, this is also a very remote thing. Especially, the semiconductor required in the era of the fourth industry is extremely small. , Highly integrated and very cutting-edge technology products, big chips can be manufactured by anyone, but very small and very concentrated semiconductors must have technical capabilities, but China cannot even meet 20% to 30% of its domestic needs.”
“If there are no foreign semiconductor imports, or foreign semiconductor companies that have entered China to produce, China’s industry is difficult to maintain. Therefore, China (the CCP) cannot carry out such an attack on semiconductors, because this is also huge for China (the CCP). Blow.”
Release Lee Jae-yong from prison, South Korean government releases pro-U.S. signal
At 10 o’clock in the morning on August 13, the actual controller of Samsung Group, Samsung Electronics Vice President Lee Jae-yong was released from prison on parole. After 207 days, Li Zairong regained his freedom.
South Korean President Moon Jae-in issued a position on Lee Jae-yong’s release on parole, stating that this was a choice made for the benefit of the country and hoped that the people would understand.
Senior officials of the Blue House also stated that some people requested that Lee Jae-yong be released on parole on the grounds of implementing follow-up measures to build a global semiconductor supply chain and ensure vaccines between South Korea and the United States. The role of.
At the end of 2016, Lee Jae-yong was arrested in February 2017 for investigation by the prosecutors in the case of former South Korean President Park Geun-hye’s cronies. In January this year, he was sentenced to two and a half years in prison in the second instance. After deducting the previous detention time, there is about one and a half years left in prison. Li Zairong was originally scheduled to complete his sentence next year.
Since Lee Jae-yong was imprisoned, various groups in South Korea have asked the government to release Lee Jae-yong on parole in order to stabilize the South Korean economy. Although Samsung’s day-to-day operations were not affected by Lee’s absence, sources in the company once told Reuters that decisions on major investment and mergers and acquisitions should only be made by Lee. Especially at a time when there is a global chip shortage and competitors such as TSMC and Intel are making large-scale investments, the most important decision awaiting Li Zairong’s nod is the selection of a US$17 billion US factory.
In May of this year, Moon Jae-in publicly stated that in the next 10 years, South Korea will invest more than 510 trillion won (approximately US$437.4 billion) in semiconductor companies such as chips.
South Korea will be led by Samsung and SK Hynix, and 153 companies will form a national semiconductor team. Moon Jae-in said that Samsung Electronics plans to expand its memory and system semiconductor production lines on a large scale in Pyeongtaek and Hwaseong. SK Hynix also plans to establish a new large-scale production base in Yongin.
Shi Shan, a China expert and Epoch Times columnist, said that the main reason for Moon Jae-in to change his attitude and release Lee Jae-yong was the US government. After taking office, Moon Jae-in adopted a pro-communist policy and promised the “three noes” to the CCP: not deploying additional THAAD systems, not joining the US missile defense system, and not forming a military alliance between South Korea, the United States and Japan. However, in the past two years, the international situation has changed drastically, especially the reorganization of the global supply chain led by the United States, South Korea may be abandoned outside this chain.
Ishiyama said that Moon Jae-in understands that South Korea can develop through cooperation with the United States. Once the United States is excluded from the supply chain, the South Korean economy will collapse in the next 20 years. So in June of this year, Moon Jae-in hurried to the United States to meet Biden with the goal of “returning to the team,” and South Korea wanted to return to the high-end supply chain of the United States. @
Editor in charge: Shao Yi
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