Key Highlights:
- Samsung has formally announced the construction of a new advanced chip-making factory in Texas, which is expected to cost roughly $17 billion.
- Samsung intends to break ground on the site next year and begin manufacturing semiconductors in 2024.
- The chip-making sector is planning to boost manufacturing capacity, but many of the new units will not be operational for some time.
Samsung to construct new chip-making factory
Samsung has formally announced the construction of a new advanced chip-making factory in Texas, which is expected to cost roughly $17 billion and generate 1,800 jobs. The new plant will be built near Taylor, some 30 miles from Austin, where Samsung already has a facility. The new location is around 1,200 acres in size, which makes it larger than Samsung’s Austin facility.
Kinam Kim, vice chairman and CEO of Samsung Electronics Device Solutions Division, stated in a statement, “With greater manufacturing capacity, we will be able to better service our customers’ demands and contribute to the stability of the global semiconductor supply chain.”
“In addition to our Texas partners, we are thankful to the Biden Administration for fostering a climate that supports firms like Samsung as we endeavor to increase leading-edge semiconductor production in the United States,” he said. We also commend the administration and Congress for their bipartisan support in enacting government incentives for domestic chip manufacturing and innovation as soon as possible.”
Samsung to begin manufacturing semiconductors in 2024
Samsung intends to break ground on the site next year and begin manufacturing semiconductors in 2024. Eventually, Samsung is planned to begin using the new factory to manufacture CPUs for its own use as well as for use in the products of other firms.
The city of Taylor also offered Samsung incentives to establish the facility there, including property tax discounts of up to 90% for the first ten years.
Samsung is a memory chip manufacturing behemoth, but the Taylor factory will most certainly be used to produce sophisticated chips for other firms based on their ideas. According to previous rumors, this new factory might make chips as sophisticated as 3nm. Previously, Samsung developed processors for businesses such as Qualcomm and Nvidia.
The expansion comes as the worldwide chip scarcity continues to wreak havoc on everyone from console makers to automakers. According to Intel CEO Pat Gelsinger, the situation is unlikely to improve until at least 2023.
Boosting US chip production
As a result, the Biden administration is aiming to boost US chip production, decreasing the risk of supply chain disruption and reversing the country’s recent decline in manufacturing share. The Senate just authorized $52 billion in subsidies for new chip manufacturing factories, but the House has yet to ratify the CHIPS Act.
The chip-making sector is planning to boost manufacturing capacity, but many of the new units will not be operational for some time. Production at TSMC and Sony’s planned $7 billion chip facility in Japan will not begin until the end of 2024, the same year as TSMC’s massive $12 billion Arizona plant. TSMC has stated that it intends to invest more than $100 billion in new semiconductor plants over the next three years, while Intel intends to invest a comparable amount in the US and Europe over the next decade.
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