Samsung Electronics Co has unveiled plans to invest US$17 billion in a new advanced chip plant in Texas, a marquee project that would fortify the US semiconductor industry.
“Increasing domestic production of semiconductor chips is critical for our national and economic security,” US Secretary of Commerce Gina Raimondo said in a statement on Tuesday.
The project would result in the creation of more than 2,000 jobs, Texas Governor Greg Abbott told a a news conference announcing the plan.
Photo: EPA-EFE
“The implications of this facility extend far beyond the boundaries of Texas,” Abbott said. “It’s going to impact the entire world.”
South Korea’s largest company would build the facility in Taylor, about 50km from Austin, where Samsung has invested billions in a sprawling complex that houses more than 3,000 employees and fabricates some of the country’s most sophisticated chips.
Construction is to start in the first half of next year, and the plant would begin production in the second half of 2024.
Samsung joins Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) in making substantial investments in the US.
The new facilities would further US President Joe Biden’s goal of safeguarding the production of cutting-edge chips vital to defense, as well as technologies like autonomous vehicles.
It is part of Washington’s broader effort to counter China’s rising economic power, as well as lure home some of the advanced manufacturing that in past decades has gravitated toward Asia.
“Samsung’s new plant would help narrow the gap with TSMC’s production capability by making chips at the clients’ home,” said Kim Sunwoo, an analyst at Meritz Securities. “As the US prioritizes domestic chip manufacturing, the company will be able to receive various benefits with its production base in the country.”
A global chip crunch exposed imbalances in the industry and prompted governments from Brussels to Tokyo to court TSMC and Samsung — the two companies that make most of the world’s most advanced chips for clients like Apple Inc and Nvidia Corp.
Neither the Texas project nor TSMC’s US$12 billion Arizona expansion are likely to alleviate the shortages immediately, but their construction could lay the groundwork for a future US-centered chip ecosystem by attracting and training the component suppliers that typically spring up around such operations.
In June, Biden laid out a sweeping effort to secure critical supply chains, including a proposed US$52 billion to bolster domestic chipmaking.
His administration has repeatedly voiced the need to increase semiconductor production in the US, saying that was the best way to compete with China and mitigate disruptions like those stemming from COVID-19.
“Samsung is targeting American customers aggressively,” said Jeff Pu (蒲得宇), an analyst at Haitong International Securities Group (海通國際證券).
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