SEOUL, August 25 (AJP) - South Korea’s biggest manufacturers are pouring billions of dollars into new plants and subsidiaries in the United States, a shift that is raising alarms about the slow erosion of the country’s own industrial base.
Driven by Washington’s subsidies and political pressure to “make it in America,” Korean firms have sharply accelerated their investments abroad.
Government data show manufacturers invested $1.8 billion in North America in the first quarter of this year — more than 16 times the $114 million they put into Europe. The number of new North American subsidiaries reached 31, quadruple the figure in Europe.
The long-term trend is even starker. Between 2020 and 2024, Korea’s manufacturing investment in North America more than tripled, from $2.41 billion to $7.45 billion, while the number of subsidiaries nearly doubled.
Samsung Electronics is building a $17 billion semiconductor plant in Texas. SK Group has pledged $52 billion for American ventures spanning chips, biotech and energy.
Hyundai Motor is committing $21 billion to its electric vehicle and battery businesses in the U.S., anchored by a new steelworks in Louisiana. Hanwha Group has acquired Philly Shipyard and is constructing a $2.5 billion solar facility in Georgia, bolstered by a U.S. government loan guarantee.
While these projects are welcomed in Washington, they are stirring unease in Seoul.
Economists warn that the steady outflow of factories risks undermining Korea’s capacity to sustain growth in high-value industries. Without strong support for research and development at home, they say, the country could find itself hosting global headquarters in name only while production — and eventually innovation — shifts abroad.
The issue is expected to feature in the upcoming Korea-U.S. summit talks, where new investment pledges are likely.
But in Korea, calls are mounting for tax credits and industrial policies to keep advanced R&D anchored onshore before the country’s role as a manufacturing powerhouse erodes further.
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