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South Korean giant SK Group is pouring $22 billion into the United States

The funding announcement comes simply because the group’s huge chipmaking unit warned of weaker client demand for expertise merchandise for the remainder of the 12 months. It additionally coincided with a key vote within the US Senate on Tuesday to push ahead a invoice that seeks to extend home manufacturing of semiconductors.

Leaders from the mammoth SK Group met nearly with US President Joe Biden on Tuesday to announce the landmark deal, which is predicted to create greater than 15,000 new jobs.

Whereas the precise timeline for the investments was not disclosed, Biden said that the Seoul-based company large plans to develop its US workforce from 4,000 to twenty,000 individuals by 2025.

SK Group mentioned it might direct the funding to elevated manufacturing and growth of semiconductors, electrical car batteries, and prescription drugs.

As much as $14 billion will go towards constructing two new gigafactories in Tennessee and Kentucky, in a three way partnership with Ford (F), the group’s chairman, Tae-won Chey, mentioned in remarks made public by the White Home.

Biden touted the announcement as “proof that america, Korea and its allies are again, and successful the expertise competitors of [the] twenty first century.”

“Prior to now, these sorts of expertise investments went to China,” he mentioned.

The president mentioned he had taken a better take a look at South Korea’s superior manufacturing capabilities throughout his journey to the nation in Could, the place he additionally visited a Samsung (SSNLF) manufacturing facility and met with the chairman of Hyundai.
Biden, who participated within the assembly nearly from the White Home residence after testing positive for Covid-19 final week, acknowledged the irony of welcoming friends from South Korea whereas he was isolating mere yards away.

“I really feel so badly — I am so near you,” he instructed the SK delegation, later posting a shot on social media of him waving from a balcony.

SK Group had already earlier this year committed $30 billion in america by the top of 2025. Biden and Chey mentioned Tuesday that the brand new funding was on high of that.

The information got here as SK Hynix, the group’s chipmaking unit, warned Wednesday that it anticipated gross sales of some electronics to drop within the coming months.

Whereas the corporate loved robust gross sales within the second quarter — with its income reaching a report excessive — it anticipates a slowdown in demand for reminiscence chips within the second half of the 12 months.

That is as a result of shipments of PCs and smartphones that use these parts might be “decrease than initially predicted,” SK Hynix mentioned in an announcement throughout its earnings presentation.

The corporate is the world’s second biggest flash reminiscence chipmaker and a provider to Apple (AAPL), amongst different manufacturers.

— CNN’s Donald Judd contributed to this report.

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