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South Korea’s SK Group to Invest $22 Billion to US

WASHINGTON, DC - JULY 26: U.S President Joe Biden participates virtually in a meeting with members of the SK Group, including the Chairman and Principal Owner Chey Tae-won in the White House on July 26, 2022 in Washington, DC. During the meeting President Biden discussed the company’s investments in United States manufacturing and jobs. (Photo by Anna Moneymaker/Getty Images)
Photo Credit: Getty Images

The second most prominent company in South Korea has vowed to invest over $22 billion in the United States. Included in the plans are to prioritize the production of chips and clean energy resources.

The SK Group made its announcement. Its chipmaking department forecasted a weak consumer demand in the second half of 2022. The decision is also timely as the U.S. Senate recently voted and supported a bill that aims to increase the production of semiconductors in the country.

Due to restrictions, the leaders of the conglomerate met with U.S. President Joe Biden virtually. The investment by the gigantic SK Group is set to open more than 15,000 jobs.

No timeline relating to the newly-agreed partnership has been disclosed yet. However, Biden revealed that SK Group intends to increase its U.S. workforce by 20,000 by 2025, from its current 4,000.

The $22 billion in funding, according to the SK Group. It will be poured into the ramping up of the production of electric vehicle batteries, pharmaceuticals, and semiconductors.

SK Group

Meanwhile, $14 billion will be directed to the creation of ‘gigafactories’ that will take dwelling in Tennessee and Kentucky. The gigafactories is a joint partnership by the SK Group, and Ford – Ford’s chairman, Tae-won Chey, announced this matter.

Biden was delighted with the development; he said this is “evidence that the United States, Korea and its allies are back, and winning the technology competition of [the] 21st century.”

“In the past, these kinds of technology investments went to China,” the president added.

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In his last visit to South Korea last May. Biden saw the advancements made by the country in terms of manufacturing. The U.S. president also met with Hyundai’s chairman and visited Samsung’s factory.

Biden felt a little disappointed, considering. He was only yards away from the members of the SK Group during their meeting. The conference was done virtually because Biden had to isolate himself after testing positive for Covid days ago.

“I feel so badly — I’m so close to you,” he said to the group. Biden then posted a video on his Twitter account showing him waving to the group from the White House balcony. Where he stayed in isolation for the time being.

The plan was announced earlier

In early 2022, the SK Group announced its plans to strengthen. Its ties with the U.S. through increased technology and clean energy investments.

According to the company’s statement:

… SK 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. SK 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, SK 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.

SK, 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.

The SK Group’s chipmaking department, SK Hynix. Is expecting losses in the sales of their electronics as they expect it to drop.

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The second quarter was specifically strong for the company. However, they have projected that sales of their memory chips will be down in the following quarters.

The chipmaking unit said in a report that their anticipation came with the knowledge. That the smartphones and P.C.s that use their product as main components will be lower than what is projected.

The group is a well-known supplier of chips to several companies, including tech giant and leader Apple.

Source: CNN

Opinions expressed by Economic Insider contributors are their own.

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