Korean President Moon Jae-in and U.S. President Joe Biden explain the outcomes of their talks at a joint news conference following the summit at the East Room of the White House on May 21. (Photos on the courtesy of Cheong Wa Dae website)

President Moon Jae-in and U.S. President Joe Biden agreed to reaffirm their commitment to ramp up the alliance between South Korea and the United States and ensure peace on the Korean Peninsula during their summit on May 21.

The two leaders agreed to pursue a global COVID-19 vaccine partnership while reaffirming their commitment to engage in talks with North Korea for denuclearization of the Korean Peninsula.

President Moon said he and Biden agreed on the importance of dialogue with North Korea and set the complete denuclearization of the peninsula as the most pressing shard task.

Biden reaffirmed his country’s willingness to have dialogue with North Korea, saying he has picked former U.S. Ambassador to Seoul Sung Kim as his special envoy for Pyongyang.

Korean President Moon Jae-in and U.S. President Joe Biden have in-depth discussions on diverse agenda for their first encounter, which was extended to almost six hours.

President Moon Jae-in meets with U.S. House Speaker Nancy Pelosi at the United States Capital in Washington on May 20.

The project will help accelerate the end of the COVID-19 pandemic by increasing the world’s vaccine supply, President Moon said. “In particular, it will contribute to vaccine supply in the Indo-Pacific region, and in the process, be of great help to securing a stable supply for South Korea, too,” he added.

Cheong Wa Dae said Korea and the United States agreed to expand cooperation to advanced and new technology areas essential for future competitiveness such as civilian space exploration, 6G, quantum technology, clean energy, and advanced nuclear power.

The two leaders agreed to lift U.S. guidelines on South Korea’s missile development programs and make their joint entry into third countries through Korean-U.S. cooperation on nuclear power.

The agreement came after the two leaders held their first in-person meeting at the White House four months after Biden took office.

President Biden extended thanks to Korean business leaders, including SK Group Chairman Chey Tae-won, Samsung Electronics Vice Chairman Kim Ki-nam, Hyundai Motor President Gong Young-woon and LG Energy Solution President Kim Jong-hyun, for their investments in the U.S. during a joint news conference following the summit.

Korean President Moon Jae-in meets with U.S. Vice President Kamala Harris to exchange views on the pending issues of both countries on May 21.

Korean companies announced plans to invest a combined $39.4 billion (44 trillion won) in the United States during the Korea -U.S. Business Roundtable held prior to the summit. Samsung Electronics plans to invest $17 billion won in a foundry plant project. SK Hynix announced a $1 billion investment plan to establish a massive R&D Center in Silicon Valley.

LG Energy Solution and SK Innovation decided to pour about $14 billion in battery joint-venture and battery single investments in the United States. Hyundai Motor plans to invest $7.4 billion in areas such as EV production and charging infrastructure there.

President Moon resumed his overseas diplomacy by making the five-day trip to the United States. The latest summit cameo ne year and five months after he visited China for a tripartite summit with China and Japan in December 2019.

The Korea-U.S. summit talks, the first such ones since the spread of the COVID-19 pandemic, came at the invitation of U.S. President Biden.

The event is evaluated to serve as an opportunity for both countries to not only show their determination toward Korea-U.S. alliance, but also to solve the pending state issues, such as policies on North Korea, vaccines, EVs and semiconductors.

President Moon and President Biden took up issues such as improving inter-Korean relations, the denuclearization of the Korean Peninsula and Korea-U.S. cooperation in issues such as ones related to vaccines, EVs and semiconductors.

The United States wants Korea, a country with global semiconductor, EV and battery makers, to provide support to the U.S. move to realign chip and battery supply chains, while holding China in check.

The reason is that President Moon is accompanied by a large-sized economic delegation comprising of managers in the vaccine, chip and battery sectors, including those from conglomerates like Samsung, Hyundai Motor, SK and LG groups.

President Moon Jae-in, U.S. Commerce Secretary Gina M. Raimondo, Korean and U.S. government officials as well as businessmen from semiconductors, battery, car and vaccine sectors get together to discuss ways of further ramping up partnerships for the stabilization of Korean and U.S. supply chains at their joint business roundtable held at the Commerce Department.

In particular, Samsung Electronics plans to make a massive investment in the U.S. chip industry. President Moon is to tour SK Innovation’s EV battery plant in Atlanta, Georgia, on May 22, after the summit talks with President Biden.

President Moon, his final one year in office, is mindful of restarting the peace initiative on North Korea. He met with U.S. political leaders, including U.S. House Speaker Nancy Pelosi, during his visit to the United States.

The Biden administration is reportedly seeking a middle line between Donald Trump’s “grand bargain” and Barack Obama’s “strategic patience” approaches designed to cope with North Korea nuclear issues.

U.S. President Trump’s summit diplomacy with North Korean leader Kim Jong-un, brokered by President Moon, fell apart after wrangling over U.S. sanctions against North Korea.

Hyundai Motor sees the Korean-U.S. summit as a good opportunity to enter the U.S. EV market. U.S. President Biden has pledged to expand eco-friendly EVs, while Hyundai Motor’s releasing EV “IONIQ 5” based on the EV platform, dubbed “E-GMP.” Hyundai Motor Chairman Chung Eui-sun finalized a plan to invest into the United States after he toured a plant in Alabama last month to see if IONIQ 5 can be produced there.

The plan calls for investing a combined $7.4 billion (8.3 trillion won) in expanding hydrogen infrastructure and the urban air mobility (UAM) business on top of the production of IONIQ 5. Hyundai Motor President Gong was accompanying President Moon instead of Chairman Chung.

Hyundai Motor’s investment in the U.S. EV industry is a win-win strategy for both sides: the U.S. administration strives to raise the supply rate of EVs while Hyundai Motor wants to raise its share in the American EV market. SK, SK and LG business groups announced plans to make investments in the United States on the sidelines of the Korean-U.S. summit talks.

Samsung Electronics plans to invest about 20 trillion won in a new foundry plant in the United States, business sources said. “Samsung Electronics’ announcement of its investment plan will be the highlight of the Korean-U.S. summit talks,” they said.

Samsung Electronics participated in a semiconductor meeting, presided over by the U.S. Commerce Department on May 20, prior to the Korean-U.S. summit talks.

President Moon Jae-in, guided by H. Delano Roosevelt, a grandson of U.S. president Franklin D.Roosevelt and concurrently chairman of U.S-Saudi Business Council, visits the Franklin D. Roosevelt Presidential Library and Museum. Moon’s visit may be construed as his determination to overcome the crisis, caused by COVID-19 pandemic, and implement the Korean New Deal.

TSMC, Google, Amazon, GM and Ford also partook in the session. The Biden administration is trying to secure new technology hegemony by concentrating global semiconductor plants in the U.S. to realign the global chip supply chain.

Intel had already announced a massive investment plant into a semiconductor plant in Arizona. TSMC of Taiwan, the global foundry No. 1 maker, revealed a sweeping plan to increase the number of its U.S. chip plants from current one to six.

If Samsung Electronics’ investment plan is implemented, it will have economic spill-over effects worth about 10 trillion won plus an effect of creating 20,000 jobs. Samsung Electronics has reportedly requested tax benefits worth as much as 1 trillion won in return for the spill-over effects and job creation.

It is not necessary to build semiconductor plants abroad since chips are exported or imported as non-tariff items. But building plants near finished product companies have strengths such as a reduction in logistics costs and risks and seamless collaboration.

Most Samsung Electronics customer companies are American firms. Chip makers want to build all chip process lines, requiring many gifted manpower, in the neighborhood of customer companies like the United States, but favor Southeast Asian countries and China with cheaper labor costs for back-end processes.

Experts share the view that Korean chipmakers won’t build plants in Korea, opting instead to do so in the United States due to favorable benefits.

Prof. Lee Jong-hwan of Sangymyung University System Semiconductor Engineering Department was quoted as saying that Korean chipmakers’ building front-line plants in countries such as the United States are more advantageous than doing it in Korea from the viewpoint of the technology-oriented semiconductor business.

 
In Korea, there are many stumbling blocks standing in the investments such as a variety of regulations and restrictions and insufficient tax benefits, so companies are turning to invest abroad, a great loss of national interests such as youth job creation, he said.

Reports said Samsung Biologics would sign a CTO contract with Moderna Inc. to produce the latter’s vaccines against the COVID-19 pandemic. If it is realized, Korea is expected to establish itself as a global vaccine hub by securing the technologies related to the vaccines.

Among the Korean economic delegation accompanying President Moon were Samsung Biologics CEO John Rim and SK Bioscience CEO Ahn Jae-yong. Samsung Biologics is to strike a CTO vaccine deal with Moderna while SK Bioscience is to sign a similar contract with Novavax of the United States.

Samsung Biologics is known to have virtually agreed on a CTO deal with Moderna. The company, now outfitted with full production processes for antibody drugs, is required to an additional vaccine production processes.

Samsung Biologics is expected to be responsible for the production of finished vaccines, after receiving the original agent related to mRNA vaccine from Moderna.

Samsung Biologics is expected to take time to supply vaccines after achieving commercialization. Currently, Green Cross has the rights on domestic licenses and distributing Moderna vaccines.

Samsung Biologics is required to gain additional permissions on the vaccine CTO production. A domestic item permission on Moderna vaccines is expected to be granted soon.

SK Bioscience is considering extending a consignment contract with Maryland-based Novavax to produce its COVID-19 vaccine antigen beyond this year.

SK Bioscience signed a CDMC contract on the production of Novavax vaccines last August. The former acquired the technologies necessary for the production of Novavax vaccines in February.