Samsung to invest $17bn in Texas chip factory
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South Korean electronics giant is making its largest-ever investment in the US, with plans to build a large chipmaking plant. The investment, according to Samsung, brings its total investment in the US to $47bn.
The site is near the small city of Taylor, which is northeast of Austin, Texas. According to Samsung, the company chose the site after considering locations in Arizona and New York, but chose Texas due to the presence of government incentives, its proximity to its Austin plant, and the “readiness and stability” of local infrastructure. The plant is expected to generate 2,000 technology jobs and 6,500 construction jobs, Reuters reported.
The Republican governor of Texas, Greg Abbott, celebrated the announcement with a tweet saying: “Welcome to Texas, Samsung!”. Abbott’s office said Samsung would receive a $27m grant to support job creation.
Construction will begin in early 2022 and the plant will be operational by the second half of 2024. Chips made at the facility will be used to seize the opportunities of 5G, artificial intelligence, and high-performance computing, Samsung said.
Chipmaking has been disrupted by the coronavirus pandemic and restrictions placed on technology companies amid the trade war between the Trump administration and Beijing.
“With greater manufacturing capacity, we will be able to better serve the needs of our customers and contribute to the stability of the global semiconductor supply chain,” said Dr Kinam Kim, chief executive of Samsung Electronics Device Solutions.
The Biden administration welcomed the news, writing in a statement that the facility would help “protect our supply chains, revitalise our manufacturing base, and create good jobs.”
US Commerce Secretary Gina Raimondo added: “Increasing domestic production of semiconductor chips is critical for our national and economic security.”
The ongoing semiconductor shortage is causing disruption for many industries, including consumer electronics, defence and the automotive industry. For instance, Ford, Jaguar Land Rover, Volkswagen, General Motors, Nissan, Daimler, BMW, Renault and Toyota have shut factories, scaled back production or exclude high-end features such as integrated satellite navigation systems which rely on high-end semiconductor technology.
There is no clear end in sight. In June, Intel CEO Pat Gelsinger warned that it could take many years for the shortage to be resolved as supply chains struggle under the “explosive growth” in semiconductor demand. Meanwhile, geopolitical tensions are motivating the US government to invest tens of billions of dollars into establishing technology supply chains independent of China. The US share of global chip manufacturing has declined from 37 per cent of the market in 1990 to just 12 per cent today, according to the Semiconductor Industry Association.
Intel announced in May that it will equip its New Mexico operations for the manufacture of advanced semiconductor packaging technologies with a $3.5bn investment. TSMC has committed to build a $12bn manufacturing plant in Arizona, and Australian rare-earth miner Lynas is building a processing facility in Texas, both supported by US government subsidies.
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