Yahoo Finance Biden Hails US-South Korea Alliance on Tour of Samsung Plant
(Bloomberg) -- President Joe Biden called the U.S-South Korea alliance “a lynchpin of peace, stability, and prosperity” during a visit Friday to a Samsung Electronics Co. semiconductor complex as he seeks to bolster supply chains that reduce reliance on China.
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“I’ve just seen how this plant makes the most advanced semiconductor chips in the world,” Biden said following a tour of the facility, his first stop after landing outside Seoul to start a five-day visit to South Korea and Japan.
During the trip, Biden’s first to Asia as president, he’s meeting with regional leaders in a bid to firm up support for helping Ukraine fend off Russia’s invasion and countering security threats posed by China and North Korea, which may conduct its first nuclear test since 2017 with Biden nearby.
“The alliance between the Republic of Korea and United States of America is a lynchpin of peace, stability, and prosperity for a region of the world that we seek,” Biden said.
South Korean President Yoon Suk Yeol, who took office May 10, joined Biden at the event and said that “based on advanced technology and supply chain cooperation,” he’d seek to upgrade US-South Korea relations “into an economic-security alliance.”
Biden’s trip to the Samsung facility underscores the emphasis he’s placed on strengthening semiconductor alliances among the world’s largest chip making countries to try to ease shortages that have dragged on the global economy. The complex in Pyeongtaek, south of Seoul, houses the some of biggest chip production lines in the world and makes a wide range of products from memory chips to logic chips for Qualcomm Inc. and other companies.
Samsung is responsible for a third of global memory chip production and controls just less than 20% of outsourced chips for tech clients. South Korea’s largest company has been expanding its facilities at home and in the US to keep up with soaring demand.
South Korea “is taking a key role in a global chip supply chain by producing 70% of memory chips for the global market,” Yoon said.
Biden renewed his call for Congress to pass a broad China competition bill that includes $52 billion in funding for domestic semiconductor research and manufacturing.
Read more: Biden Demands Passage of China Bill as Democrat Skips Ohio Event
Lawmakers still have to work out differences between the Senate- and House-passed versions of the legislation, a process that could take until the end of the summer.
The White House has often used the continuing global semiconductor shortage and its impact on inflation as arguments for approval of the massive subsidies program. But analysts say the shortage will last through 2023, and the domestic supply of chips coming online will not meaningfully alleviate the crunch.
Biden touted plans for new US investment that Samsung announced late last year. The company chose Texas in a $17 billion plan as the site of an advanced chip plant set to break ground this year, with a target to kick off operations in the second half of 2024.
Face-to-Face meetings
Biden plans additional meetings Saturday with Yoon, who has backed Biden’s supply chain initiatives and signaled he intends to join a new regional economic grouping the US president is expected to unveil in Japan.
“I look forward to a few days together where we can get to know one another better and explore ways to take the alliance between the Republic of Korea and the United States to an even greater heights than it already exists,” Biden said Friday.
The Indo-Pacific Economic Framework, which follows the US’s withdrawal from talks on the Trans-Pacific Partnership regional trade agreement under former President Donald Trump, is part of the Biden administration’s efforts to counter China’s clout in Asia.
But some Asian nations are reluctant to sign on because they’re unsure what it will mean, US Ambassador to Japan Rahm Emanuel said.
Read more: Some in Asia Confused by Biden Strategy, Envoy Rahm Emanuel Says
Some of the framework’s details remain hazy, and the Biden administration has stressed it won’t include lower tariffs or better access to US markets.
Nuclear threat?
North Korea, which has a habit of timing its provocations to political events, may be preparing to launch an intercontinental ballistic missile or conduct a nuclear test to coincide with Biden’s trip to the region, security officials in the US and South Korea said this week.
Read more: Biden Has Little to Entice Kim Jong Un to Stop Weapons Tests
The U.S. push to isolate Russia over Vladimir Putin’s war in Ukraine, coupled with increasing animosity toward China, has allowed North Korean Leader Kim Jong Un to strengthen his nuclear deterrent without fear of facing more sanctions at the United Nations Security Council.
There’s little chance Russia or China would support any measures against North Korea, as they did in 2017 following a series of weapons tests that prompted Trump to warn of “fire and fury” from Pyongyang.
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