South Korean media have recently forecasted that the investment strategies of South Korean and Taiwanese semiconductor firms in the United States could shift depending on the outcome of the US presidential election. Should Donald Trump return to the White House, it is expected that Samsung Electronics, and possibly TSMC, might scale back their American investments, with Samsung likely redirecting its focus back to South Korea.
A South Korean economic magazine recently cited industry insiders suggesting that a Trump victory might see a renewed focus on bolstering domestic chipmakers like Intel and GlobalFoundries. This could significantly curtail support and subsidies for foreign companies such as Samsung and TSMC.
Trump previously remarked that US financial support for Taiwan to build semiconductor factories would ultimately strip America of all its semiconductor business, sparking widespread debate.
Under President Biden's semiconductor subsidy program, Samsung and TSMC have been building new foundries in Texas and Arizona, respectively. Samsung plans to invest US$45 billion by 2030, while TSMC aims to invest about US$65 billion. Recently, both firms secured substantial subsidies from the US government, with Samsung receiving up to US$6.4 billion and TSMC up to US$6.6 billion.
However, many in South Korea's industry believe a Trump presidency could alter these investment plans. Trump might introduce new conditions for subsidies to foreign foundries. Analysts note that rising labor costs and inflation, which have already delayed new plant production dates for Samsung and TSMC, could become more pronounced issues.
A semiconductor expert from the Korea Institute for Industrial Economics & Trade (KIET) stated that the US attracts foreign investment through subsidies and other incentives. If Trump takes office, this aggressive courting of foreign firms may cease, replaced by support exclusively for American companies. Should this occur, Samsung might find little incentive to invest further in the US, opting to concentrate on South Korea's Yongin cluster and other domestic locations.
Samsung and TSMC face a widening market share gap in the foundry sector. A change in the US administration could impact Samsung more adversely than TSMC. As the AI semiconductor industry evolves, second and third-tier companies are rapidly closing the gap, posing additional challenges for Samsung.
The US aims to capture a 20% market share in advanced processes below 10nm by 2030, signaling its intention to surpass Samsung and close in on TSMC in cutting-edge technology. To achieve this, it is anticipated that US support will increasingly favor Intel.
Intel recently secured US$8.5 billion in semiconductor subsidies from the US government, including loan support, totaling US$20 billion in financial backing. South Korean academic experts suggest that Samsung might lag significantly behind, with Intel's greatest advantage being its robust support from the US government.
