The United States requires South Korean chip companies to increase the number of local factories

Abstract:

According to the latest report from South Korea's Chosun Ilbo, the U.S. government is negotiating with the South Korean government to expand memory chip production in the United States, a move aimed at coping with increasing supply chain pressure. Since most of the world's DRAM production capacity is concentrated in South Korea, with SK Hynix and Samsung being the major manufacturers, the Trump administration is trying to persuade South Korean memory chip companies to increase investment in domestic DRAM fabs in the United States to improve the supply chain situation.

It is reported that the United States was previously dissatisfied with the intensity and progress of Korean companies' investment in the United States, believing that although relevant companies have made commitments to expand production, their progress is still slow. However, the new round of strategic investment discussed this time will be independent of the US$350 billion expansion agreement reached by South Korea and the United States last year. It is a new factory construction plan with a scale of several billion US dollars. According to reports, the new investment plan is expected to be announced in September, when the outside world will learn more about the specific arrangements for Korean memory chip manufacturers to invest in the United States.

It is also worth noting that the chairman of SK Group and Samsung are currently facing increasing pressure to build factories. The two plan to meet with the President of the United States to discuss how to balance the expansion of production in the United States. Industry insiders point out that for a modern DRAM wafer fab, the entire process from land survey, permit approval, factory construction, clean room construction, to purchasing manufacturing equipment still takes several years. This means that even if the relevant agreement is finally reached, the imbalance between supply and demand in the memory chip market in the next few years will still be difficult to fundamentally change in the short term.