US President Joe Biden starts Asia trip with global issues and tech shortage on agenda

In Beijing, Foreign Ministry spokesperson Wang Wenbin said that China noted Sullivan's remarks that Biden's visit to the region 'is not aiming at confrontation with China'.

Published: 20th May 2022 03:51 PM  |   Last Updated: 20th May 2022 03:51 PM   |  A+A-

US President Joe Biden (L0 and South Korean President Yoon Suk Yeol

US President Joe Biden (L0 and South Korean President Yoon Suk Yeol. (Photo| AP)

By Associated Press

PYEONGTAEK: US President Joe Biden is opening his trip to Asia with a focus on the computer chip shortage that has bedeviled the world economy, touring a Samsung computer chip plant that will serve as model for a USD 17 billion semiconductor factory that the Korean electronics company plans to open in Texas.

The visit on Friday is a nod to one of Biden's key domestic priorities of increasing the supply of computer chips. 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 US voters.

Biden will grapple with a multitude of foreign policy issues during a five-day visit to South Korea and Japan, but he also crafted an itinerary clearly meant to tend to the concerns of his home audience as well.

Previewing the trip aboard Air Force One, White House national security advisor Jake Sullivan said Samsung's investment in Texas will mean "good-paying jobs for Americans and, very importantly, it will mean more supply chain resilience".

Biden also aims to boost economic and military connections with South Korean and Japan, key alliances as the US and China, the world's two largest economies, increasingly compete against each other despite the high volume of trade between the two countries.

In Beijing, Foreign Ministry spokesperson Wang Wenbin said China noted Sullivan's remarks that Biden's visit to the region "is not aiming at confrontation with China". "We hope that the US side can match its words with deeds, and work with regional countries to discuss a plan for solidarity and cooperation in the Asia-Pacific region, rather than plotting plans for division and confrontation," Wang told reporters Friday at a daily briefing.

Greeting Biden at the plant in South Korea will be the country'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, slightly more than a week ago.

He campaigned on taking a tougher stance against North Korea and strengthening the 70-year alliance with the US. 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. US government officials have estimated that chip production will not be at the levels they would like until early 2023.

Global computer chip sales totalled USD 151.7 billion during the first three months of this year, a 23 per cent jump from the same period in 2021, according to the Semiconductor Industry Association. More than 75 per cent of global chip production comes from Asia.

That's a possible vulnerability the US hopes to protect against through more domestic production and USD 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 US for military gear as well as consumer goods. Similarly, the hermetic North Korea has been test-firing ballistic missiles amid a coronavirus outbreak, a possible risk to South Korea's manufacturing sector should the brinksmanship escalate.

In terms of chip production, China leads the global pack with a 24 per cent share, followed by Taiwan (21 per cent), South Korea (19 per cent) and Japan (13 per cent). Only 10 per cent of chips are made in the US, according to the Semiconductor Industry Association.

Samsung announced the plant in Taylor, Texas in November 2021. It hopes to begin operations in the second half of 2024.

The South Korean electronics giant chose the site based on a number of factors, including government incentives and the "readiness and stability" of local infrastructure. The White House said in a fact sheet issued Friday that semiconductor companies have announced nearly USD 80 billion in US investments through 2025.

That sum includes USD 20 billion for Intel's plant outside Columbus, Ohio, up to USD 30 billion by Texas Instruments, a USD 1 trillion expansion by Wolfspeed in North Carolina and investments by Global Foundries and SK Group.



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