August 20, 2022

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Right here’s what South Korean big SK Group is doing with its US$22b funding within the US

Right here’s what South Korean big SK Group is doing with its US$22b funding within the US. (Picture by Anna Moneymaker / GETTY IMAGES NORTH AMERICA / Getty Pictures through AFP)SK Group is investing US$22 billion within the US’ semiconductors, inexperienced vitality and bioscience tasks.The landmark deal is anticipated to create greater than 15,000 new jobs, and SK Group plans to develop its US workforce from 4,000 to twenty,000 folks by 2025.As much as US$14 billion will go towards constructing two new gigafactories in Tennessee and Kentucky, in a three way partnership with Ford.South Korean second largest conglomerate, SK Group, has been working within the US during the last three a long time by means of a number of of its corporations, with websites in additional than a dozen states. Prior to now two years alone, SK corporations have invested US$5 billion, rising their US belongings to US$13 billion and doubling worker headcount to greater than 4,000 immediately.Then in Might this 12 months, SK corporations introduced its plans to take a position a further US$30 billion within the US by the top of 2025, practically tripling their US belongings and quadrupling the variety of US workers. The South Korean conglomerate’s investments have been primarily pushed by a world technique to advance new sustainable companies. Whereas most of us following the information would have reckon that the corporate is completed with its meant investments–not less than for now–we’re in for a shock. The South Korean second-largest firm simply introduced that it’s pouring in one other US$22 billion into the states, specializing in high-priority areas together with chips and clear vitality.The funding announcement, coinciding with a key vote within the US Senate on Tuesday to push ahead a invoice that seeks to extend home manufacturing of semiconductors, got here even after the group’s large chipmaking unit warned of weaker client demand for expertise merchandise for the remainder of the 12 months. That mentioned, SK Group mentioned it will direct the funding to elevated manufacturing and growth of semiconductors, electrical automobile batteries, and prescribed drugs.The landmark deal, anticipated to create greater than 15,000 jobs, have been introduced by leaders from the mammoth SK Group to US President Joe Biden just about on Tuesday. The precise timeline for the investments have been nevertheless not disclosed, however Biden did say that the Seoul-based company big plans to develop its US workforce from 4,000 to twenty,000 folks by 2025.We had SK Group on the White Home for a gathering immediately.They’re investing billions in producing microchips right here at residence – which is able to assist our provide chain and create jobs. The assembly was digital, however I couldn’t miss the chance to say “hey” – even at a distance. pic.twitter.com/vrizC8UN11— President Biden (@POTUS) July 26, 2022Up to US$14 billion of the funding will go towards constructing two new gigafactories in Tennessee and Kentucky, in a three way partnership with Ford, the group’s chairman Tae-won Chey mentioned, in remarks made public by the White Home. “SK will make investments half of our complete funding quantity within the US within the semiconductor ecosystem.  Effectively, this cash will fund R&D applications in partnership with the main American universities and restoration of superior packaging (inaudible) within the US. Effectively, this initiative will contribute to growing the subsequent era of reminiscence chips, which is able to profit all the US high-tech business,” Chey added.He additionally shared that US$5 billion from the US$22 billion can be poured into different inexperienced vitality companies, together with the ultra-fast EV charging system, the inexperienced hydrogen, and battery supplies, recycling, and likewise small modular reactors. “Additionally, our funding will develop our facility within the US within the bioscience and bio pharmaceutical sectors. We consider our initiatives will contribute to strengthening the US provide chain resilience and to handle local weather change,” Chey mentioned.For Biden, the announcement is solely an “proof that the US, Korea and its allies are again, and successful the expertise competitors of [the] twenty first century.” He iterated how “Prior to now, these sorts of expertise investments went to China.” The president just lately had the prospect to witness South Korea’s superior manufacturing capabilities throughout his journey to the nation in Might. At that time, he additionally visited a Samsung manufacturing unit and met with the chairman of Hyundai.For context, South Korea is among the many 4 international locations which are part of the US-led Chip 2 Alliance. Whereas Japan and Taiwan have been fast to comply with the US on the Chip 4, South Korea has in a roundabout way agreed to it, contemplating its economical ties with China. Josep Bori, Analysis Director within the Thematic workforce at GlobalData, reckons “South Korea is in a troublesome place, as it can wish to stability its publicity to the Chinese language market, together with its native manufacturing functionality, with its publicity to the US market and its important reliance on US semiconductor manufacturing gear and design software program.”General, given the management that the US, South Korea, Taiwan and Japan exert over the worldwide semiconductor provide chain, GlobalData mentioned it’s comprehensible that China is worried in regards to the deliberate Chip 4 alliance. “Notably so with South Korea, because it dominates in areas akin to reminiscence, supplies, wafer fabrication, and gear.”
Dashveenjit Kaur
| @DashveenjitKDashveen writes for Tech Wire Asia and TechHQ, offering research-based commentary on the thrilling world of expertise in enterprise. Beforehand, she reported on the bottom of Malaysia’s fast-paced political enviornment and inventory market.

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