South Korean giant SK Group invests $22 billion in the US

The funding announcement came just as the group’s large chip manufacturing arm warned of declining consumer demand for technology products through the end of the year. It also coincided with a key vote in the US Senate on Tuesday to push forward a bill aimed at boosting domestic semiconductor production.

Executives from the giant SK Group met virtually with US President Joe Biden on Tuesday to announce a landmark deal that is expected to create more than 15,000 new jobs.

Although the exact timing of the investment has not been disclosed, Biden said that the Seoul-based corporate giant plans to increase its U.S. workforce from 4,000 to 20,000 by 2025.

SK Group said it will direct the funding to increase the production and development of semiconductors, batteries for electric vehicles and pharmaceuticals.

Up to $14 billion to build two new gigafactories in Tennessee and Kentucky as part of a joint venture with Ford (F)This was stated by the chairman of the group, Tae Won Chey. remarks published by the White House.

Biden called the announcement “proof that the United States, Korea, and their allies are back and winning the technology competition.” [the] 21st century.”

“In the past, this kind of technology investment went to China,” he said.

The president said he took a closer look at South Korea’s advanced manufacturing capabilities during his trip to the country in May, where he also visited Samsung (SSNLF) factory and met with the Chairman of the Board of Hyundai.
Biden, who attended the meeting practically from the White House residence after testing positive for Covid-19 last week, acknowledged the irony of hosting guests from South Korea while he isolated himself just a few yards away.

“I feel so bad – I’m so close to you,” he told the UK delegation, later posting on social media a picture of him waving from a balcony.

SK group already before that year invested $30 billion in the United States by the end of 2025. Biden and Chey said on Tuesday that the new investment was on top of that.

The news comes after SK Hynix, the group’s chip manufacturing arm, warned on Wednesday that sales of some electronic devices are expected to fall in the coming months.

Although the company posted strong sales in the second quarter, with revenue reaching an all-time high, it expects demand for memory chips to slow in the second half of the year.

This is because shipments of PCs and smartphones that use these components may be “lower than originally estimated,” SK Hynix said in a statement during its earnings presentation.

The company is the world’s second largest manufacturer of flash memory chips and a supplier of Apple (AAPL)among other brands.

— Donald Judd of CNN contributed to this report.

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