(Updated with comments from U.S. and South Korean presidents, Hyundai Motor capex details)

South Korea’s two biggest household manufacturers Samsung Electronics and Hyundai Motor indulged U.S. President Joe Biden in his first state visit to the country this weekend with a tour to a heavily-guarded next-gen chip facility and $5.54 billion EV project in Georgia, a state that had been pivotal in Biden’s election win.

Jay Y. Lee, vice chairman and de facto head of Samsung Electronics, has passed a court showing to personally host Biden who headed straight to the world’s top memory maker’s new chip facility in Pyeongtaek complex upon arrival late Friday afternoon.

Samsung Electronics showed the U.S. presidential delegation and President Yoon Suk-yeol who has greeted his U.S. counterpart at the chip site a tour of the newest wafer line and 3nm-class GAA (gate-all-around) chip prototype, the Korean chip major’s prized strength against foundry leader TSMC.

Instead of a guestbook, they signed onto wafers before they stepped into the production site.

“I’ve just seen how this plant makes the most advanced semiconductor chips in the world,” Biden said after the tour.

He was the first U.S. president to seek out an industrial site first in South Korea instead of U.S. army base or the demilitarized zone while on a state visit. Economic and business issues have eclipsed over the North Korea and security issue despite elevated military provocation for the American president’s first visit to traditional allies of Korea and Japan. He has stopped in Korea before visiting Japan for the launch of the Indo-Pacific Economic Framework aimed to build up technology and economic alliance in the region against the rise of China and in the backdrop of global supply chain instability aggravated by Russia’s aggression in Ukraine.

The U.S. visitors were shown the lines where the first customized chip from the 3nm-based wafer line will be churned within the first half of this year to beat TSMC in the next-gen migration race.

GAA technology is considered as an upgrade from existing fin field-effect transistor (FinFET), providing improved channel control. According to Samsung Electronics, its 3nm GAA process promises a 45 percent reduction in chip area with 50 percent lower power consumption.

Biden was accompanied by Qualcomm’s CEO Cristiano Amon. Qualcomm, U.S-based processor chip giant was listed as one of Samsung’s five key chip clients.

Yoon, just 10 days in office, emphasized evolution of bilateral relationship into “an economic security alliance,” proudly adding chips “are national security assets responsible for our future” as Korea is “taking a key role in global chip supply chain by producing 70 percent of memory chips for the global market.”

Biden holding formal summit talks with Yoon on Saturday said, “The alliance between the Republic of Korea and United States of America is a lynchpin of peace, stability, and prosperity for a region of the world we seek.”

After summit talks, Biden would separately meet with Hyundai Motor Group’s chief Chung Euisun before he leaves for Japan on Sunday to thank him for the car group’s investment plan in the U.S.

Timed with Biden’s arrival in Korea, Hyundai Motor Group on Thursday in U.S. time signed a contract to build and open the Korean auto conglomerate’s first fully-dedicated EV and battery manufacturing in the state of Georgia.

According to the announcement, Hyundai Motor Group will invest $5.54 billion to build smart factory devoted to EVs and batteries in Bryan County Megasite and its suppliers will invest another $1 billion. Construction will begin in January 2023 to ready manufacturing in annual capacity of 300,000 units in early 2025. It is unclear who the battery maker would be, but SK on is building a manufacturing site in Georgia capable of supporting 300,000 EVs a year.

The funding is part of Hyundai Motor’s pledge of $7.4 billion investment in the U.S. to raise green car sales in the U.S. up to 50 percent and have 3.23 million EV cars globally by 2030.

Until final agreement after further negotiations, the deal is a “active economic development project”, the state government posted in its website.

Kia has a manufacturing factory across the state close to the border with Alabama, where Hyundai Motor’s existing factory is located. Combined with Hyundai, Kia, and Genesis brands, the Korean auto group aims to become one of top three EV sellers in the U.S. by 2025.

By Lee Seung-hoon, Jung Yoo-jung, Seo Hye-seung and Cho Jeehyun

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