Biden lauds chip plant as a model for stronger ties
PYEONGTAEK, South Korea — President Biden opened a trip to Asia on Friday by touring a South Korean computer chip factory that will be the model for a similar plant in Texas, offering it as a way to deepen ties with the Indo Pacific region and fuel technological innovation and foster vibrant democracies.
“So much of the future of the world is going to be written here, in the Indo Pacific, over the next several decades,” Biden said. “This is the moment, in my view, to invest in one another to deepen our business ties, to bring our people even closer together.”
Biden’s message was pitched toward the promise of a better tomorrow, yet was also aimed at U.S. voters amid political challenges at home, such as inflation driven higher by the chip shortage, as he tries to show that his administration is delivering on economic growth.
Samsung, the chip plant owner, last November announced plans to open a $17 billion semiconductor factory in Texas. 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. voters. The Democrat, on his first visit to Asia as president, noted that the Texas plant would add 3,000 high-tech jobs and the construction would include union labor.
Throughout the five-day visit to South Korea and Japan, Biden will grapple with a multitude of foreign policy issues. In his remarks Friday, Biden did not mention China, which has emerged as a prime competitor with the U.S., yet he stressed the value of alliances that currently exclude that country.
Greeting Biden at the plant was South Korea’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, just this month. He campaigned on taking a tougher stance against North Korea and strengthening the 70-year alliance with the U.S.
Before Biden spoke, Yoon said he hoped the U.S.-South Korea partnership evolves into an “economic and security alliance based on cooperation in advanced technology and supply chains.”
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 testfiring ballistic missiles amid a coronavirus outbreak, a possible risk to South Korea’s manufacturing sector should the brinksmanship escalate.