Is the first investment project in the U.S. undergoing changes? Reports suggest that the U.S. is pressuring Samsung and SK Hynix to build memory factories in the U.S. South Korea urgently denies this but refuses to disclose details.

The South Korean presidential office, Cheong Wa Dae, recently denied a local media report that the government is discussing with the United States the inclusion of a semiconductor project as the first investment project under the $350 billion investment commitment to the U.S. Cheong Wa Dae stated in a text message that the report regarding the two countries discussing semiconductors as the first strategic investment project is "not true," but refused to provide further details on the negotiations surrounding the investment commitment between South Korea and the U.S. According to reports, unnamed officials from the ruling party previously claimed that the U.S. had requested South Korea to prioritize investment in U.S. memory chip production facilities, which has cast uncertainty on Seouls plan to announce its first investment project in the U.S. by the end of this month. The reports indicated that this request from the U.S. was a core topic during a closed-door trade meeting at Cheong Wa Dae on August 13. Previously, South Korea had prioritized the energy sector as its first major investment project in the U.S., but the U.S. unexpectedly shifted its priority and made additional demands, altering the negotiation landscape. Most officials in attendance believe that investing in memory chip production facilities in the U.S. is unrealistic. The primary reason is that Samsung Electronics (SSNLF.US) and SK Hynix (SKHY.US) have announced plans to invest approximately 800 trillion won (about $580 billion) in building chip and data centers in the southern Chungcheong province of Korea. If they were to additionally invest heavily in memory production facilities in the U.S., it could dilute the companies' investment capabilities and impact the domestic semiconductor industry cluster and ecosystem. An insider stated, "Memory is a strategic industry for Korea and must be considered alongside the domestic cluster and semiconductor ecosystem." The timing of the U.S. formally making this request is also quite delicate. The South Korean government had just announced major investment plans by Samsung Electronics and SK Hynix in the Chungcheong province at the end of June. U.S. Secretary of Commerce Gina Raimondo publicly named the two companies on July 9, expressing a desire to bring them to the U.S. for building production facilities. Cheong Wa Dae's Policy Chief Kim Yong-bum subsequently responded on social media, stating, "The expansion of the wafer fabs in the Republic of Korea is a national project." Following this, discussions about memory began transitioning from open confrontations to behind-the-scenes negotiations. In this context, South Korea's Minister of Trade, Industry and Energy, Moon Sung-wook, urgently went to the U.S. on the 16th, just three weeks after his last visit. During his time in Washington, he expressed South Korea's intention to announce the investment project between the end of August and early September. However, as negotiations entered their final stages, various practical issues emerged. Analysts in the diplomatic community suggest that this reflects ongoing differences between the two sides regarding project selection, investment scale, and conditions. What concerns South Korea even more is that the delay in announcing the investment is reigniting U.S. pressure regarding tariffs. Insiders report that the U.S. has again mentioned the possibility of reinstating higher tariffs on South Korean goods such as automobiles. In January of this year, former President Trump threatened to raise the South Korean automobile tariff from 15% to 25%, citing delays in the investment process. After the legislation passed in March, this pressure eased. However, with the number one project still undecided, dissatisfaction on the U.S. side is rising once again. There are also signs that this pressure is spreading to the realm of security cooperation. Subsequent discussions on introducing U.S. nuclear-powered submarines, revising the nuclear cooperation agreement, and other issues have struggled to take place since the first meeting in Seoul in June. The second meeting, originally scheduled for July in Washington, has yet to materialize. Senior officials from the ruling party are concerned that "trade issues are eroding security negotiations," and if the U.S. uses security cooperation as leverage, the situation could become even more complicated. Analysts believe South Korea is currently in a dilemma: on one hand, it needs to announce its first investment project in the U.S. as soon as possible to display goodwill and ease overall relations; on the other hand, the U.S. continuously adds demands, increasing pressure for commercial rationality reviews and domestic industry protection. If not handled properly, the negotiations for investment in the U.S. could become protracted, and South Korea-U.S. economic, trade, and security cooperation could also be adversely affected.