New York (CNN Business) South Korea’s second-largest conglomerate is investing $22 billion in the United States, in high-priority areas including chips and clean energy.
The funding announcement comes just as the group’s massive chip-making unit warned of weaker consumer demand for technology products for the rest of the year. It also coincided with a key vote in the US Senate on Tuesday to push forward a bill that seeks to boost domestic semiconductor production.
Executives from the huge SK group met virtually with US President Joe Biden on Tuesday to announce the landmark deal, which is expected to create more than 15,000 new jobs.
While the exact timeline for the investments was not disclosed, Biden said the Seoul-based corporate giant plans to increase its US workforce from 4,000 to 20,000 people by 2025.
SK Group said it would direct the funding to increased production and development of semiconductors, batteries for electric vehicles and pharmaceuticals.
Up to $14 billion will go toward building two new gigafactories in Tennessee and Kentucky, in a joint venture with Ford ( F ), the group’s chairman, Tae-won Chey, said in statements released by the White House.
Biden hailed the announcement as “proof that the United States, Korea and its allies are back, winning the technology race in [the] 21st century.”
“In the past, this kind of technology investment went to China,” he said.
The president said he had taken a closer look at South Korea’s advanced manufacturing capabilities during his trip to the country in May, where he also visited a Samsung ( SSNLF ) factory and met with the chairman of Hyundai.
Biden, who attended the meeting virtually from the White House residence after testing positive for Covid-19 last week, acknowledged the irony of welcoming guests from South Korea while isolating himself just feet away.
“I feel so bad – I’m so close to you,” he told the SK delegation, later posting a shot on social media of him waving from a balcony.
SK Group had already earlier this year committed to $30 billion in the US by the end of 2025. Biden and Chey said on Tuesday that the new investment was on top of that.
The news came as SK Hynix, the group’s chip-making unit, warned on Wednesday that it expects sales of some electronics to fall in the coming months.
While the company had strong sales in the second quarter – with turnover at record high levels – it expects a decline in demand for memory chips in the second half of the year.
That’s because shipments of PCs and smartphones that use these components may be “lower than originally forecast,” SK Hynix said in a statement during its earnings presentation.
The company is the world’s second largest flash memory chip manufacturer and supplier to, among others, Apple (AAPL).
— CNN’s Donald Judd contributed to this report.
