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The second largest company in South Korea has announced that they will be investing $22 billion into the United States. They plan on prioritizing production of chips and clean energy resources, which could mean big things for America.
The SK Group has made an interesting decision after its chipmaking department forecasted a weak consumer demand in the second half of 2022. The news is also timely as Senate voted and supported bill aimed at increasing semiconductors production within America just weeks ago.
The leaders of the S.K Group met with U.S President Joe Biden virtually to discuss their investment plans that are expected create more than 15,000 jobs in America.
The newly-agreed partnership is set to increase the number of SK Group employees in America by 20,000 in 2025. This figure adds to the existing 4,000 employees of the group. Meanwhile, no timeline has been disclosed yet relating to the plans of both parties.
According to the group, billions of dollars are appropriated in ramping up production for electric vehicle batteries, pharmaceuticals, and semiconductors.
The billion-dollar plan to create ‘gigafactories’ in Tennessee and Kentucky was announced this week by Ford Chairman Tae Won Chey. The partnership between the SK Group with Ford is part of the effort to increase the manufacturing rate of the semiconductors and other products.
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According to Biden, the recent investment plans by the SK Group is “evidence that the United States, Korea and its allies are back, and winning the technology competition of [the] 21st century.” He adds that he is happy with the planned developments.
Biden added, “In the past, these kinds of technology investments went to China.” President Joe Biden visited South Korea last year and saw the advancements that have been made in the country in terms of manufacturing. He met with Hyundai’s chairman and visited the factory of Samsung.
Biden said that he felt disappointed after he had to only virtually meet with the SK Group as he had been isolated after testing positive for Covid days before their scheduled meeting.
Vice President Joe Biden posted a video on Twitter showing him waving to the group from a balcony in the White House, where he stayed in isolation during the conference. “I feel so badly — I’m so close to you,” he said to the SK Group members.
SK Group will strengthen ties with US
The group said that they want to strengthen their connection with the US.
In their statement, the group said,
According to the company’s statement:
… S.K. companies increase their presence around the world and in the U.S., driven by a mission to build businesses that have a positive impact on the environment and society. S.K. companies have more than $13 billion in U.S. assets with plans to invest an additional $30 billion by the end of 2025. Over that same period, S.K. companies are expected to grow from a combined 4,000 U.S. employees today to 20,000 employees.
The U.S. expansion and investments will largely be focused on clean energy and technology, including batteries for electric vehicles, charging infrastructure for electric vehicles, hydrogen energy and energy storage solutions. Semiconductors and life sciences also will be areas of emphasis.
S.K., which has operated in the U.S. for more than three decades, has a strong base in the U.S., with sites in more than a dozen states and the District of Columbia.
Read the full statement here.
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The second quarter of this year has been especially strong for the company’s chipmaking department. However, they have projected that sales will be down in their following quarters.
The chipmaking unit’s anticipation came with knowledge that smartphones and P.C.’s using their product as main components will be lower than what is expected.
The group is the world’s leading supplier of chips to several companies, including Apple.
Opinions expressed by CEO Weekly contributors are their own.
