Coverage: Samsung wants to expand its U.S. operation

Samsung Electronics Co. is in talks to expand its manufacturing operations in the United States with a new facility for home appliances.

Jing Cao of Bloomberg News had the story:

“This is a complex process that, like all strategic business decisions, will not be made final until it is determined through proper due diligence and planning that it is the best option for Samsung,” the company said in a statement. A Samsung representative in the U.S. wouldn’t comment beyond confirming the talks and said the company started reviewing options in the country early last fall.

The election of U.S. President Donald Trump influenced Samsung’s interest in a U.S. factory, according to the sources cited by the Journal. Trump campaigned on a promise of creating jobs in the U.S. and bringing back manufacturing, and has threatened to impose stiff tariffs on imports.

Samsung’s de facto chief, Jay Y. Lee was the only executive from a foreign company invited to a tech industry meeting Trump held in December, the Journal said.

Lee was not present at the meeting. He has been embroiled in a corruption scandal in South Korea since late last year and was indicted in February on bribery and embezzlement charges.

Berkeley Lovelace Jr. of CNBC.com reports that some of that production will come from Mexico:

A Samsung representative told CNBC Thursday morning Asia time that the company was in “preliminary discussions related to opening a new manufacturing facility in the U.S. for home appliances.” The electronics giant began reviewing manufacturing operations early last fall, the representative said.

The representative added that no final decisions have been made yet. “This is a complex process that, like all strategic business decisions, will not be made final until it is determined through proper due diligence and planning that is is the best option for Samsung.”

Trump has frequently lashed out at U.S. companies for moving operations and jobs to countries such as Mexico. Trump called for a 35-percent border tax on American businesses that move jobs abroad and import products back into the U.S. market.

“I certainly support a form of tax on the border,” he told Reuters last month. “What is going to happen is companies are going to come back here, they’re going to build their factories and they’re going to create a lot of jobs and there’s no tax.”

Timothy W. Martin of The Wall Street Journal reported that five states are being considered:

The initial capital investment is expected to be around $300 million, several of the people said, with Samsung shifting some production of oven ranges to the U.S. from Mexico. The move could generate around 500 jobs, those people said.

Talks are continuing and no final decisions have been made, with a start date for oven-range production still undetermined, the people said, so the details may change.

In subsequent years, Samsung could eventually ramp up U.S. manufacturing of refrigerators, washers, dryers and other home appliances, which could make the total investment significantly larger, according to people familiar with the discussions. But no firm deadline or commitment is set for those decisions, the people said.

Samsung’s interest in a U.S. factory was influenced by the election of U.S. President Donald Trump, according to people familiar with the matter. Mr. Trump campaigned on a desire to create more manufacturing jobs in the country—and has threatened potential penalties for companies that don’t comply.