This is not the best news for the Korean startup scene. Korean conglomerates invest in the US Market to expand their global positioning. Conglomerates like Samsung, SK, Lotte, LG, and others have started building plants in the United States and investing in US companies. This plan is to expand into the world’s biggest customer market. The movement began when Donald Trump got elected in 2020. Trump wanted to bring more international companies into the US to create jobs.
Moreover, this was especially important because of COVID-19 and its impact on unemployment in the United States. Many Korean conglomerates have already started building plants in the US from 2019-2020. Many of these projects started before the COVID-19 outbreak. Now in 2023, this trend continues to grow under Joe Biden.
In 2021, Lotte Chemical Group completed a $3 billion plant in Louisiana, becoming the first Korean chemical firm in the US. This move got Lotte Group Chairman Shin Dong-bin to meet with then-US president Trump. This was the first Korean Chaebol to meet with a US President. Trump even tweeted a photo of himself with the Chairman.
This plant in Louisiana will create thousands of jobs in the city. For Lotte, this move expands its brand into the US market and will allow Lotte to expand other ventures so they can also enter the United States.
Lotte Chemical USA and Eagle US 2 have formed the LACC, a joint venture dedicated to a petrochemical project in Louisiana. LACC has been funning ethane crackers since early 2019. The facility can produce around 1 million tons of ethylene per year.
Moreover, Lotte Biologics Co. will be looking to invest in the US Bio industry in 2023. They aim to turn the plant in Syracuse into the best ADC-specialized contract production service center in North America. They plan to start construction by the second half of 2025.
They will invest $650 million into this project by 2025. The plant is expected to bring over 2,600 jobs to Jackson County by 2023. Currently, SK employs 1,000 people at the facility. This was the largest development deal in Georgia. Many experts say the battery plant could attract more electric vehicle supply chain components to the state and open economic development opportunities for different industries. Therefore, look for SK innovation to form a partnership with Tesla moving forward or with Kia Motors, which runs a manufacturing plant in Georgia.
SK Group has operated in the US for over 30 years, with sites in over a dozen states. Their total investment into the US market stands at $13 billion. Then in mid-2022, they stated they would invest an additional $30 billion in the US by the end of 2025. Their focus will be on high-demand areas such as semiconductors and green energy. $14 billion of the investment will go towards two gigafactories in Tennessee and Kentucky in a joint venture with Ford. In addition, $5 billion will go towards clean energy, including EV charging stations, green hydrogen, and battery materials recycling.
LG Electronics has built a $250 million manufacturing plant, creating more than 600 jobs. The plant manufactures appliances such as washing machines and refrigerators. This factory represents a $360 million investment in total by LG. It is being called the world’s most advanced, integrated washing machine production plant. The manufacturing plant produced its one millionth washing machine in August 2020. So far, their products have been well received by customers. Moreover, according to the American Customer Satisfaction Index Rankings, LG holds the top spot in overall customer satisfaction across its home appliance portfolio. This includes laundry and other major appliances.
“[The Plant] increased LG’s competitiveness in the US, increasing speed to market and responsiveness to changing market conditions,” said the CEO of LG Electronics North America, Thomas Yoon.
LG will invest an additional $20.5 million to help meet US demand for its top-rated washing machines. This will increase production and create an additional 330 new jobs, bringing the total number of jobs created in Clarksville, Tennessee, to about 1,000. Furthermore, Korean companies, including LG, have already invested over $1.5 billion in private capital in Tennessee, which has led to the employment of more than 4,500 Tennesseans.
Korean conglomerates invest in US markets to make lasting partnerships with US brands. GM and LG are on track to open their 2nd and 3rd plants in 2023 and 2024. The aim is for GM to hit 1 million EV production capacity per year in 2025.
Samsung has built a $380 million home appliance manufacturing facility in South Carolina. Moreover, they were able to hire 650 full-time employees for their facility. The US is one of the fastest-growing markets for home appliances, so it was easy for Samsung to build a plant in America. Samsung hired 800 employees. In addition, most employees are from Clemson University and the University of South Carolina. Therefore Samsung is helping the next generation of manufacturing workers in the region.
Samsung has been investing in the US market heavily starting in 2021. They plan to invest $17 billion to build foundry chip production lines in Texas. The current plan is to target the second half of 2024 for the factory to be fully operational. They already have a foundry chip factory in the state, making this factory the second.
Overall, Samsung plans to invest under $200 billion in the US market over the next 20 years. This includes creating 11 new semiconductor production lines in Texas (2 in Austin and 9 in Taylor). It is estimated to create 10,000 new jobs by 2034.
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