Samsung plans to build a $17 billion chip plant in Texas

4 days ago

Semiconductors are seen connected a circuit board.

Justin Sullivan | Getty Images

Samsung is readying to physique a $17 cardinal semiconductor mill successful Taylor adjacent Austin, Texas, implicit the adjacent 3 years arsenic portion of an effort to summation its manufacturing capableness and alleviate the planetary spot shortage.

The South Korean tech elephantine announced the 5 cardinal quadrate metre facility Tuesday, a time aft The Wall Street Journal broke the news.

The mill volition purpose to assistance boost accumulation of precocious logic semiconductors, which are utilized successful phones and computers.

Samsung said it expects gathering enactment to commence successful the archetypal fractional of 2022 and it hopes to person the tract successful cognition by the 2nd fractional of 2024.

The full expected concern of $17 cardinal volition beryllium the largest concern Samsung has ever made successful the U.S. The fig includes buildings, spot improvements, machinery and equipment.

Samsung began operations successful the U.S. successful 1978 and it employs implicit 20,000 radical crossed the country. The latest concern volition bring Samsung's full concern successful the U.S. to much than $47 billion, the institution said.

In February, President Joe Biden said home semiconductor manufacturing is simply a precedence for his administration. His medication hopes to hole ongoing spot shortages and code lawmaker concerns that outsourcing chipmaking had made the U.S. much susceptible to proviso concatenation disruptions.

Kinam Kim, vice president and CEO of the Samsung Electronics Device Solutions Division, said successful a connection that the mill volition assistance Samsung to amended service the needs of its customers and "contribute to the stableness of the planetary semiconductor proviso chain."

Kim added that helium was grateful for enactment from the Biden medication and partners successful Texas.

Greg Abbott, the politician of Texas, said the mill volition bring opportunities for Central Texans and their families.

Alan Priestley, vice president of emerging technologies and trends astatine expert steadfast Gartner, told CNBC that Samsung already has a good established ecosystem of partners and suppliers successful Texas due to the fact that it already has a mill successful Austin.

"A batch of semiconductor companies person improvement sites successful Austin truthful it's a bully excavation of resource," helium said.

"As with immoderate large concern similar this determination were nary uncertainty section incentives (tax breaks, financing etc) to promote Samsung to physique successful Texas," Priestley added.

Samsung's 2 main rivals successful the semiconductor manufacturing marketplace are Intel and TSMC.

In March, Intel announced that it is spending $20 cardinal to physique 2 caller spot plants successful Arizona. Meanwhile, TSMC is besides gathering a caller factory successful Arizona.

The immense bulk of the world's chips are presently made successful Asia, with Taiwan and South Korea being peculiar hotbeds of activity. The U.S. and Europe privation to commencement making much of their ain chips.

Headquartered successful Hsinchu, Taiwan, TSMC was liable for 24% of the world's semiconductor output successful 2020, up from 21% successful 2019, according to the company.