Samsung to leverage chip investment for 'vaccine swap'
People stand in line near ticket booths to receive COVID-19 vaccine injections at a pop-up vaccine center at New York City's Grand Central Terminal, last week. UPI-Yonhap
By Kim Yoo-chul
By Kim Yoo-chul
Samsung Group, the sprawling South Korean business conglomerate, is being highlighted ahead of President Moon Jae-in's first-ever summit with U.S. President Joe Biden at the White House on May 21. Samsung's biotechnology affiliate is set to reach a “vaccine swap” in return for the conglomerate's semiconductor unit investing billions of dollars to boost memory chip production in the United States.
A few days before Moon's visit to Washington, D.C., Cheong Wa Dae said the two leaders are set to explore during the summit the best possible ways to boost bilateral cooperation in vaccines.
More specifically, Lee Ho-seung, the President's chief policy secretary, said the U.S. has a strong interest in turning South Korea into a global vaccine production hub. Lee explained that the plan makes sense, since the U.S. possesses vaccine patents and raw materials, while South Korea possesses the world's second-highest drug manufacturing capacity.
President Moon is under pressure to secure more COVID-19 vaccines. In the early stages of the pandemic, Seoul had been relatively successful in containing the spread of the coronavirus through effective quarantine measures and aggressive testing. However, the Moon administration has been slow to secure enough vaccines to inoculate the country's 52 million people to reach its goal of achieving herd immunity by November this year.
Discussions are now underway with the U.S. Centers for Disease Control and Prevention (CDC) to sign a deal with the Korea Disease Control and Prevention Agency (KDCA) before and after the summit to have the U.S. provide surplus Pfizer and Moderna vaccines.
“Samsung Biologics could play a greater role as it already produces vaccines at its manufacturing plants in South Korea on a contractual basis. What Samsung wants is to acquire some patented technology not just to win vaccine production orders from Pfizer and Moderna, but to expand its supply lines in Asia and Europe,” a senior executive said by telephone, Sunday. Samsung Biologics CEO John Rim is reportedly set to accompany Moon on his visit to Washington.
So far, the U.S. has shown reluctance in sharing some of the patented biopharmaceutical technologies of its bio companies, since they are considered “strategic items,” according to sources.
Samsung officials declined to comment. But sources said its planned memory chip investment in the U.S., estimated to be as high as $20 billion, could assuage concerns about inking a “technology partnership” over COVID-19 vaccines.
“President Moon is expected to tell Biden what role South Korea can play, through Samsung Electronics, to back the U.S. president's semiconductor initiatives,” a government official said.
“Samsung's semiconductor investments in the U.S. could further boost investor sentiment, because most of the planned spending will be used to bolster foundry operations, in which Samsung is relatively weaker compared to its rivals. That segment was also identified by the U.S. as a strategic item,” said Kim Il-tae, senior fund manager at Meritz Investment.
Both Samsung and Pfizer denied reports that Samsung Biologics signed a deal with the U.S. drug maker to produce COVID-19 vaccines at the Korean company's plant in Incheon's Songdo, southwest of Seoul. Despite the denial, working-level discussions on the project are still underway, one bio analyst in Seoul said.
Moderna is on the move to purchase land on Yeongjong Island, near Incheon International Airport, to build manufacturing facilities or vaccine warehouses. Samsung Biologics said it will announce any updates over the possibility of manufacturing Moderna mRNA vaccines. The Moderna vaccine has yet to be approved in Korea.