U.S. election results won't threaten subsidies for Samsung, SK: Indiana commerce chief

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U.S. election results won't threaten subsidies for Samsung, SK: Indiana commerce chief

Published: 18 Oct. 2024, 06:00

SARAH CHEA
chea.sarah@joongang.co.kr

Audio report: written by reporters, read by AI

Indiana Secretary of Commerce David Rosenberg [INDIANA STATE GOVERNMENT]

[INTERVIEW]

With burgeoning uncertainties over the upcoming U.S. presidential election, Indiana Secretary of Commerce David Rosenberg says the outcome — regardless of who wins — won't drive promised subsidies away from Korean EV battery and chip producers.

“The programs are already enacted, and decisions are made, like SK hynix, that secured $450 million in subsidies from the U.S. government,” Rosenberg said in a recent video interview with the Korea JoongAng Daily, adding that “Samsung SDI has also been working with further incentive programs.”

Samsung SDI, a Korean battery maker, is building three battery plants, committing $10 billion to the state with Stellantis and General Motors.

“Indiana has been successful whether it be a Republican administration or a Democrat administration in the White House,” Rosenberg added. “There will be some changes, but I do think Indiana, especially how we view ourselves as a facilitator between industry and the federal government, will continue to be successful in that regard.”

The secretary of commerce’s remarks come in the midst of stretching concerns over the November election as Republican candidate Donald Trump publicly assailed the Biden administration’s EV shift and pledged to shred laws that offer billion dollars of incentives to Korean battery and chip makers.

Samsung SDI CEO Choi Yoon-ho, right, takes a photo with General Motors CEO Mary Barra after the two companies first signed a memorandum of understanding on a joint U.S. battery plant in March of last year. [SAMSUNG SDI]

With a rich automobile history, the midwestern U.S. state is home to operations of 15 Korean companies where they've devoted more than $15 billion in total. They've created more than 7,700 new jobs there.

Indiana, one-fifth of whose employment is carried out in the manufacturing sector, is second only to Michigan in the number of cars produced. With Toyota and Subaru having their manufacturing plants in the state, it is home to more than 500 auto parts suppliers.

“The construction in Kokomo is moving at a very rapid pace with no delays, and it looks like everything on the exterior is nearly completed,” Rosenberg said. “Dirt has already been moving up in New Carlisle, another Samsung SDI plant with General Motors.”

SK hynix executives and U.S. government officials attend an investment agreement ceremony held at Purdue University in April. [PURDUE RESEARCH FOUNDATION]

Rosenberg also pinpointed the state’s well-organized education system and its connectivity with the industry as the biggest appealing factor garnering Korean firms.

“The first piece of equipment from the Samsung SDI plant is not going into the factory, but they’re going to Ivy Tech Kokomo,” Indiana’s community college best known for manufacturing and tech programs, “to train the students on exactly what they need to do,” the secretary of commerce said.

“There’s a seamless transition into the factory, and that work force is already up and running,” he added. “What they are able to do is work directly with industry to train the work force for the future and create the training and curriculum the industry needs.”

SK hynix executives visited a few different locations in Indiana ahead of the company's surprising announcement of a $4 billion investment in building an advanced chip packaging facility in the state.

“It picked West Lafayette as the location, where Purdue University is situated, the university that had the first semiconductor degree program in the United States,” Rosenberg said.

The state’s AI-centered infrastructure and supply chain make it an optimal choice for chipmakers like SK hynix while demand for data centers grows particularly steep in the United States.

“Indiana also can be the mecca of next-generation AI with four of the big data centers located in the state, and they are the direct users of SK’s memory chips,” he added.

Amazon Web Services in April announced it would invest $11 billion to build a data center in Indiana, along with Google’s $2 billion, Microsoft’s $1 billion and Meta’s $800 million.

“With the state having the lower regulatory environment, lower taxes, lower cost of doing business, the overall ecosystem from beginning to end, from education to end users, it was very appealing, and they saw the success that they could have and the relationships that they could build, in the long term, in the state,” he added.

Indiana, in July last year, opened an office in Korea, with two folks representing the state to better communicate with Korean companies and attract more investments. Korea is one of only eight countries with a direct office of the state.

“We have a great and robust relationship with Korea and always are looking for additional opportunities.”

BY SARAH CHEA [chea.sarah@joongang.co.kr]