[Edaily Reporter Choi Oh-hyun ] The shift in major South Korean conglomerates’ overseas business hubs from China to the United States is directly linked to the rapidly changing international landscape. While China once served as the “world’s factory” thanks to its low labor costs, the strengthening of U.S. protectionism—coupled with tariff and subsidy policies—has made local production and securing supply chains in the United States key considerations for companies.

According to CEO Score, a corporate data research institute, the number of U.S. subsidiaries owned by 28 major South Korean conglomerates (excluding HMM and Coupang) has increased 3.3-fold over the past decade, from 394 to 1,308. In contrast, the number of subsidiaries in China decreased from 700 to 529. While China accounted for the largest share—23.1%—of all overseas subsidiaries 10 years ago, the U.S. has risen to first place this year with a 26.5% share. China’s share has plummeted to 10.7%.

These changes were driven by U.S. protectionist policies. Tariff pressures from the Donald Trump administration and tighter regulations on Chinese products eroded the cost advantages of manufacturing in China. Conversely, local production in the U.S. emerged as a means to reduce tariff risks and secure stable supply chains with key customers.

The number of U.S. subsidiaries belonging to the five major conglomerates—Samsung, SK, HyundaiMotor, LG Corp., and Hanwha—has surged by a staggering 648 over the past decade, rising from 240 in 2016 to 888 this year. Hanwha Group has been the most active. Hanwha’s U.S. subsidiaries increased by 311, from 63 in 2016 to 374 this year—the sharpest rise among the five major conglomerates. This growth was driven by an increase in HANWHA SOLUTIONS’ solar power production and sales subsidiaries and Hanwha Energy’s energy storage system (ESS) business subsidiaries, as well as the acquisitions of the U.S. Philly Shipyard by Hanwha Ocean and HANWHA SYSTEMS. SK Group’s U.S. subsidiaries increased by 203, from 40 ten years ago to 243. SK On’s U.S. battery business and SK Pharmteco’s contract manufacturing business for pharmaceuticals expanded, and ESS-related subsidiaries of KeyCapture Energy—acquired by SK E&S—were also added.

Samsung Group’s number of U.S. subsidiaries rose from 52 to 95. Samsung saw a sharp increase in its subsidiaries following the 2017 acquisition of Harman, a U.S.-based automotive electronics and audio specialist. The expansion was also driven by SAMSUNG SDI CO.,LTD.’s pursuit of battery joint ventures with U.S. automakers Stellantis and General Motors (GM).

In particular, the battery sector is ramping up its push into the U.S. ESS market. LG Energy Solution has also established joint ventures with GM and Honda and is expanding its battery business into the North American market. Driven by this, the number of LG Corp.’s U.S. affiliates has increased from 30 to 64. HyundaiMotor Group has strengthened local production by establishing HyundaiMotor Group MetaPlant America in Georgia. Investments in new businesses also continued, including the acquisition of Boston Dynamics and the establishment of Supernal, a future air mobility company. The number of U.S. affiliates increased from 55 to 112.

In contrast, business-specific restructuring is underway in China. During the same period, the number of Chinese subsidiaries of the five major conglomerates fell from 330 to 269. SamsungElectronics closed its smartphone production facilities in China, and LG Display sold its LCD factory in Guangzhou.

A high-ranking business executive stated, “Although the U.S. Republican and Democratic parties are politically polarized, they share a bipartisan perspective on economic security,” adding, “The trend toward U.S.-centered business restructuring will continue.”