Biden picks up the wafer and the semiconductor war begins. [김영필의 3분 월스트리트]

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Something to come must have come. US President Joe Biden’s semiconductor video conference on the 12th (local time) was more shocking than I thought.

President Biden, who attended the meeting, held a semiconductor wafer and said, “This is used for batteries and broadband networks. “This is infrastructure,” he said. “We don’t need to repair the old, we need to create a new infrastructure today.”

‘Semiconductor = Infrastructure’, this is how the Biden administration looks at semiconductors. For the countries that dominate the semiconductor market at present, it is a moment of darkness. We will deliver related news.

The president’s every step of the way is significant and important. That’s why the media asks what the president says, even a word and a nuance. In Korea, the issue itself is whether the president visits Samsung Electronics or who he meets. That’s a lot of implications.

But on that day, President Biden himself shakes the wafer and said, “This is an infrastructure,” so you can think of it as showing 200% of his will to revive the semiconductor industry. He said, “We led the world in the mid-20th century and led the world in the end of the 20th century,” he said. “We will lead the world again.”

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This means that the US will be at the center of semiconductor production. In the US, there is a strong non-memory field such as Intel, but Samsung Electronics and SK Hynix are leading the memory semiconductor market including NAND flash, and in the foundry business, TSMC of Taiwan cannot be followed. In the past semiconductor war, the US and European countries gave up production, and a natural market reorganization took place. In the semiconductor market as a whole, the U.S.’s share is about 12%.

According to the Boston Consulting Group, of the $2.5 trillion infrastructure investment plan announced earlier by the Biden government, the semiconductor industry occupied $50 billion. If support is provided, 19 new factories will be built and 70,000 jobs will be created. It is said to be. In particular, it was said that it would increase its market share, which is 12%, to 24%.

As the share of one side goes up, the other side must go down. The increase in the U.S. market share means that the share of semiconductors made by other countries or companies decreases. It means that there will be a blood fight. The US economic broadcaster CNBC saw the semiconductor market share as △26.7% in Korea, 22.9% in Taiwan, and 12% in China.

It is difficult to think that President Biden’s emphasis on semiconductor industry is simply aimed at China. The fact that President Biden said, “China does not wait,” suggests that he is trying to imprison the Chinese semiconductor industry. This is not seeing the big picture.

Of course, semiconductors alone can break China. But Biden’s idea is bigger. Let’s go upside down from the bottom. The semiconductor conference on this day is associated with a $2.5 trillion infrastructure investment plan. As I mentioned earlier, there is a 50 billion dollar semiconductor industry support plan in it.

So why did the infrastructure investment plan come out? This is important, and the goal of this plan is to rebuild the middle class. Rebuilding the middle class requires jobs, and for jobs, manufacturing needs to be revived. The checks against China are important in themselves, but there are aspects that are naturally achieved when the US middle class is revived and the manufacturing industry is revived. Investing in research and development (R&D) and infrastructure will help even more. In fact, President Biden said, “My plan is to create millions of jobs, rebuild America, protect supply chains, and revive American manufacturing.” The impact of the US manufacturing resurgence will not simply affect China.

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In particular, we need to take note of what he said that the US will lead the semiconductor industry. Keeping the Chinese semiconductor industry in check in the current situation does not make the United States the strongest in the world. In order to restore the glory of the past, US-centered investment in the semiconductor industry and market restructuring must be made.

This means that U.S. companies can re-enter large-scale investments with government support, and that there is a potential for strong pressure on major competitors. Just as TSMC or Arizona announced a large-scale investment plan and Samsung Electronics is looking for additional sites, there may be situations in which more factories will need to be built in the US in the future. It is also significant that there are criticisms that the semiconductor supply chain in the United States is excessively concentrated in East Asia.

CNBC delivered news related to the semiconductor conference that day, reporting that China, Japan, Korea and Taiwan are providing subsidies, tax incentives, and other support to the semiconductor industry, but the United States does not have one. The US government’s $50 billion grant could go into these areas, but it could be seen as an emphasis on the fact that other countries’ practices are hindering fair competition. Interfering with fair competition will lead to the US Trade Representative (USTR). We still need to look at the Biden government’s semiconductor-related promotion plans, but there are not one or two things that are worrisome.

It is also possible to predict whether the United States will appear as strong in its ally, South Korea as it does in China. It is true. As long as it doesn’t have a deep connection with China or affect the national security of the United States, it will.

But the more I look at President Biden, the more I can’t get rid of the feeling that he wants to recreate the United States he once enjoyed glory in. During last year’s presidential campaign, he showed him running on his General Motors (GM) 1967 sports car Corvette Stingray, affirming that the United States can again rise to the top of the global automobile market if it is well prepared for the electric vehicle era. President Biden places great emphasis on American values ​​and human rights.

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A strong economy leads to relaxed thinking and action. As the manufacturing industry collapsed, white workers lost their jobs, and they became dissatisfied. This is also the background behind President Donald Trump. In the meantime, immigration from Latin America and Asia increased. Biden’s emphasis on semiconductors and manufacturing is also a picture of American society as a whole. It means that if it’s not a matter of term, it won’t go over easily and in moderation.

Intel CEO Pat Gelsinger said on the day that “a third of semiconductor chip production must be produced in the United States by American companies.” Although it is from the standpoint of individual companies, what is good for GM is not something that can be spilled over as it is good for the United States. Intel also revealed that it is reviewing production within 6 to 9 months for automakers suffering from semiconductor shortages.

Of course, it is also possible to analyze that President Biden put semiconductors to the fore for the passage of the infrastructure plan to Congress. He met semiconductor executives that day and then met lawmakers from both parties.

However, you have to carefully weigh the underlying meaning. It is separate whether the United States can actually return to being the largest semiconductor powerhouse. During such an attempt, competitors and rival countries have to face bleeding competition. The burden of various expenses will also increase. I wonder if the Korean government is ready and how willing it is.

/New York = Correspondent Kim Young-pil [email protected]

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