Samsung Selects Texas as Site for $17B Fab

Article By : Alan Patterson

Proximity to Austin operations proved to be the deciding factor.

Samsung has chosen a small Texas town near Austin as the site of a $17 billion chip fab, supporting the U.S. effort to strengthen its domestic electronics supply chain.

The facility in Taylor, Texas will help boost production of advanced logic for next-generation technology, the company said in a statement. The Samsung fab will manufacture chips for mobile applications, 5G, high-performance computing and AI.

“As we add a new facility in Taylor, Samsung is laying the groundwork for another important chapter in our future,” said Kinam Kim, CEO of Samsung Electronics’ Device Solutions Division. “We will be able to better serve the needs of our customers and contribute to the stability of the global semiconductor supply chain.”

The project is critical to the U.S. goal of reviving domestic semiconductor production. The U.S. accounts for about 12 percent of global production in an industry dominated by companies in South Korea, where Samsung is headquartered, and Taiwan. Growing dependence on chip technology grabbed headlines last year as semiconductor shortages forced global automakers to idle production lines, furlough workers and sustain billion-dollar losses.

Samsung was previously in talks with three U.S. states to build the facility. Failing to gain sufficient subsidies in the U.S. would have prompted the chip maker to build its new fab in South Korea, the company said.

Kim thanked the Biden administration and U.S. lawmakers for bipartisan support to swiftly enact federal incentives for domestic chip production and innovation. Samsung did not disclose details on the incentives.

The new fab is slated to ramp production starting in the second half of 2024. The Taylor site is expected to serve as a key location for Samsung’s global semiconductor manufacturing capacity along with its latest production line in Pyeongtaek, South Korea.

The expected $17 billion investment would be Samsung’s largest in the U.S., bringing the chipmaker’s total U.S. investment to more than $47 billion. It currently has more than 20,000 U.S. employees.

The Taylor selection helps Texas maintain its position as one of several U.S. chip manufacturing sites that also include Arizona, New York and California.

“I look forward to expanding our partnership to keep the Lone Star State a leader in advanced technology and a dynamic economic powerhouse,” said Texas Governor Greg Abbott.

Texas Governor Greg Abbott and Kinam Kim, CEO of Samsung Electronics’ Device Solutions Division, seal the deal.

Samsung said its decision to invest in Taylor was based on multiple factors, including the local semiconductor ecosystem, infrastructure stability, local government support and community development opportunities. In particular, the proximity to Samsung’s current manufacturing site in Austin, about 30 miles southwest of Taylor, allows the two locations to share the necessary infrastructure and resources.

Texas was selected despite widespread power failures earlier this year in Austin, halting operations at Samsung, NXP and Infineon fabs.. The chipmakers lost hundreds of millions of dollars after the shutdown, contributing to the global chip shortage.

Samsung’s investment is expected to create more than 2,000 high-tech jobs along withthousands of related jobs once the new facility is in full operation.

The announcement comes amid bipartisan support in Washington to re-shore U.S chip manufacturing and reduce risk exposure to Asia. The Senate has approved a $52 billion package to boost new investments in domestic chip production as part of the CHIPS for America Act. The provision requires approval by the House, which has offered its own package of technology investments that place greater emphasis on chip R&D.

Samsung’s chief competitor, Taiwan Semiconductor Manufacturing Co. (TSMC), last year selected Phoenix as the site of a new fab scheduled to start production in 2024. TSMC’s total spending on the project will be approximately $12 billion from 2021 to 2029.

Meanwhile, Intel Corp. continues its site location search for a proposed U.S. “mega-fab.” An Intel spokesperson said construction of the new facility remains contingent on passage of chip legislation

As part of its investment, Samsung said it would contribute financial support to create a Samsung Skills Center for the Taylor Independent School District to help students develop skills for future careers as well as providing internships and recruiting opportunities.

This article was originally published on EE Times.

Alan Patterson has worked as an electronics journalist in Asia for most of his career. In addition to EE Times, he has been a reporter and an editor for Bloomberg News and Dow Jones Newswires. He has lived for more than 30 years in Hong Kong and Taipei and has covered tech companies in the greater China region during that time.

 

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