Meeting to Address Ongoing Automotive Chip Shortage
Samsung Electronics is in a dilemma with the Joe Biden administration trying to reshape the global semiconductor supply chain for a bigger role of the United States in it.
The White House is planning to invite major global semiconductor companies on April 12 in order to address the ongoing automotive chip shortage. National Security Advisor Jake Sullivan and many others are expected to join the meeting with automakers and semiconductor manufacturers, including GM and Samsung Electronics.
There, Samsung Electronics may be told to preferentially supply its chips to U.S. companies or expand its foundries in the United States. This year, GM, Ford and many others are suffering production setbacks due to the shortage. According to market research firms, the scale of the setbacks is estimated to have reached one million vehicles in the first quarter alone.
The meeting will also cover the United States’ long-term strategy for semiconductor supply chain reshaping. Samsung Electronics is the second-largest player behind TSMC in the global foundry market and a distant first in the DRAM and NAND flash markets. In other words, the direction of the strategy cannot but be closely related to the relationship between the United States and Samsung Electronics.
The company is currently running foundry facilities in Austin, Texas. It is planning to invest US$17 billion for another foundry in the United States although the destination of the investment is yet to be determined.
In relation to China, its largest client, Samsung Electronics is running a NAND flash plant in Xi’an and the Chinese government recently asked for an additional investment in it. In addition, the Chinese government requested more cooperation in the fields of semiconductor and 5G communications at the bilateral foreign ministers meeting on April 3.