Samsung to open another chip plant in Texas, valued at $17B

Welcome to Taylor, Texas! Samsung will build a $17B plant in the community about 30 miles from an existing Samsung Austin facility. (Samsung)

Samsung announced it will build a $17 billion chip manufacturing facility in Taylor, Texas, starting next year with completion in late 2024 to support more than 2,000 high tech jobs.

The Taylor site is 30 miles from its existing Austin plant and is larger than the one in Austin.

samsung austin chip plant
Samsung's Austin semiconductor manufacturing facility     

A Samsung official thanked Texas and federal officials, even though an incentive measure, the  $52 billion CHIPS for America Act,  still awaits final congressional funding approval.  “We are grateful to the Biden Administration for creating an environment that supports companies like Samsung as we work to expand leading edge-semiconductor manufacturing in the U.S.,” said Kinam Kim, CEO of Samsung Electronics Device Solutions Division, in a statement on Tuesday.

“We also thank the administration and Congress for their bipartisan support to swiftly enact federal incentives for domestic chip production and innovation,” Kim added.

A week ago, the Semiconductor Industry Association praised an agreement between House and Senate leaders to bring to a conference session the U.S. Innovation and Competition Act (USICA), passed by the Senate. USICA includes the $52 billion to fund CHIPS. A separate bill contains a version of the FABS Act to provide an investment tax credit to incentivize semiconductor manufacturing in the U.S.

SIA said it is hopeful that the House and Senate agreement would pave the way for CHIPS Act funding. The association represents a large body of chipmakers, including Samsung, and has lobbied Congress for measures like USICA, FABS Act and CHIPS for America because of the decline of U.S. chip manufacturing capacity. That capacity has decreased from 37% in 1990 to 12% recently, and   SIA believes the decline is due to subsidies offered by governments outside the U.S.

Samsung, based in South Korea, became the largest chipmaker globally by revenues earlier in 2021, displacing Intel. Despite its foreign roots, Samsung has been making chips in the U.S for 25 years and said the new plant in Taylor will better serves customers and contribute to the stability of the global supply chain.

Samsung said its $17 billion for the Taylor plant will mark its largest investment in the U.S., which now totals $47 billion since 1978. The company now has 20,000 workers in the U.S.  In addition to creating more than 2,000 high-tech jobs director and thousands more related jobs, Samsung is contributing financial support a Samsung Skills Center for the Taylor Independent School District to help students develop skills for future careers.

Many chip companies and analysts believe the chip shortage will last into 2023 after posing supply constraints on autos and a variety of consumer products for more than a year. Intel CEO Pat Gelsinger said there won’t be a supply-demand balance until 2023 in a recent CNBC interview.

Intel and TSMC have said they plan to each invest $100 billion in new chip factories in coming years. TSMC has plans for a $12 billion Arizona plant opening in 2024.

RELATED: Intel invests $3.5 B in N. Mexico chip expansion, atop Arizona plans

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