South Korea pays keen attention to upcoming US semiconductor bill

The South Korean government and experts in the semiconductor industry are paying close attention to a meeting hosted by the White House on Monday in the US. 

According to Seoul-based government officials and industry experts, concerns exist about recent moves by the US government to reinforce its chip industry in terms of Korea’s industrial competitiveness and Korean chipmakers’ global operations. 

The moves by the Biden administration -- the review of America’s semiconductor supply chain and legislation of a bill known as the Chips for America Act -- are viewed as an “economic war” with politics at play, industry observers say. 

The upcoming semiconductor bill is expected to pivot on two main points, noted a recent report by the Bank of America. 

What US President Joe Biden wants is to regain US leadership in manufacturing chips and to secure its supply chains that affect various industries. Also, the US is looking to cut out China in an intensifying tech war across the world. 

Under the new semiconductor bill, the US would provide stronger incentives for both domestic and foreign chipmakers to build more manufacturing facilities on US soil, which could help strengthen US supply chains within the country. 

Samsung Electronics, which runs a foundry plant in Austin, Texas, is expected to take part in the April 12 meeting, as the White House has invited the Korean chipmaker in consideration of it being a key player in the US market.

The meeting could play a critical role for Samsung to finalize its $17 billion investment plan to build another foundry fab in Austin, industry watchers say. 

The biggest concern stems from Korea’s weakness in the foundry and non-memory segments, experts say. 

“lt’s not about memory, which Korea has an absolute edge over,” said a senior researcher at a state-run institute of industries, who asked for anonymity. “Korea is far behind in the foundry and system-on-chip sectors, so the country needs to focus more on the areas by having Korean companies keep their key facilities in the country.”

“It would be difficult for Samsung not to increase its foundry facility in the US, if the government lures the Korean company with better incentives,” he said. 

In response to the US moves, the Korean government is also preparing its own measures to maintain the country’s leadership in the semiconductor market. 

“The semiconductor industry is facing a new competition among countries, beyond individual companies,” said Korean Industry Minister Sung Yun-mo during a meeting on April 9. “The government will come up with a comprehensive K-semiconductor policy that will aim at strengthening both memory and foundry production in the country in the near term.” 

By Song Su-hyun (song@heraldcorp.com)