SK to up investments in the U.S. by $22 billion, Chey tells Biden

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SK to up investments in the U.S. by $22 billion, Chey tells Biden

Published: 27 Jul. 2022, 18:04

SK Group Chairman Chey Tae-won speaks during a video conference call with U.S. President Joe Biden on Tuesday. [REUTERS]

SK companies will invest $22 billion into manufacturing advanced memory chips, electric vehicle batteries and biopharmaceuticals in the United States through 2025, SK Group Chairman Chey Tae-won told U.S. President Joe Biden.

The comments were made in a video conference with the president, U.S. Secretary of Commerce Gina Raimondo and National Economic Council Director Brian Deese on Tuesday in Washington.

Biden was unable to meet in person as he has contracted Covid-19.

The latest announcement is separate from the previously announced spending of $7 billion for EV battery production in the United States.

Of the total funding of nearly $30 billion, half will go toward semiconductors, with a focus on research and development and packaging.

"SK will invest the half of our total investment amount in the U.S. in semiconductor ecosystem," Chey said in a transcript released by the White House.

SK hynix runs chip manufacturing facilities in Korea and China, but none in the United States. SK hynix Vice Chairman Park Jung-ho has said that a research center will be built in Silicon Valley by 2026.

EV battery investments will be centered around BlueOval SK, a joint venture between SK On and Ford.

"In addition to our new EV battery factories in Georgia, we will — we will be investing more — $7 billion more out of the total, our JV investment amount — up to $14 billion — to build two new gigafactory in Tennessee and Kentucky as a part of our joint venture with the Ford Motor Company," Chey said.

Another $5 billion will be used in what Chey calls the "green energy business," which covers EV charging systems, green hydrogen, battery materials, recycling and small modular reactors.

Biden welcomed the decision.

"SK has already committed $30 billion in investment here, and today they're announcing another $22 billion in addition," he said in the transcript made public on Tuesday.

"That'll grow their U.S. workforce from 4,000 to 20,000 workers by 2025, investing in a range of advanced technologies, some of which Tony already mentioned, from semiconductors to large-capacity batteries, to electric vehicle chargers, and to pharmaceuticals," Biden added, using Chey's English name.

SK hynix Vice Chairman Park Jung-ho and Yu Jeong-joon, head of U.S. Corporate and Government Affairs at SK, joined the meeting.

The announcement came at a tricky time as SK hynix is adjusting investment plans amid heightened uncertainty at home and abroad. SK hynix last week put on hold plans to build a new chip plant in Korea. But it insists that a larger, long-term investment schedule will remain.

SK companies plan to make a combined investment of 247 trillion won ($188 billion) by 2026 in and outside of Korea, and 179 trillion won will be spent at home.

"The fact that 70 percent of the investment will be directed to Korea means that the country houses critical research and manufacturing facilities and the follow-up spending on infrastructure and research is necessary," the company said in a statement.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]