Thursday, 02 December 2021

Samsung confirms $17bn investment in Texan semiconductor fab

by Harry Baldock, Total Telecom
Wednesday 24 November 21

The move comes at a time when tensions over technological sovereignty are at a high, with the US seeking to reduce its reliance on overseas chip manufacturing

Today, Samsung has finally announced the location of its long-awaited semiconductor fab, selecting the city of Taylor, Texas, for the $17 billion project. The company first outlined plans for the investment back in February, though at the time it was unclear where exactly the plant would be constructed, with Samsung reportedly in discussions with authorities in Arizona and New York as well as Texas. Taylor was selected, at least in part, due to its proximity to Samsung&rsquo…

Today, Samsung has finally announced the location of its long-awaited semiconductor fab, selecting the city of Taylor, Texas, for the $17 billion project.

The company first outlined plans for the investment back in February, though at the time it was unclear where exactly the plant would be constructed, with Samsung reportedly in discussions with authorities in Arizona and New York as well as Texas.

Taylor was selected, at least in part, due to its proximity to Samsung’s only existing US chip fab in neighbouring Austin, around 30 miles to the south. This should provide the two facilities with various synergies as a result of sharing infrastructure and resources 

The investment is the largest by Samsung in the US and is the largest foreign investment ever in Texas. 

According to Samsung, the plant will reportedly create over 2,000 jobs, adding to the roughly 20,000 employees that the company has across the US. 

Construction on the fab will begin in the first half of next year, with commercial operations to begin in the second half of 2024.

With the fab set to create chips based on advanced process technologies for applications including mobile, 5G, and AI, the announcement will come as a major boost to the US’s domestic tech industry. The country’s current reliance on overseas manufacturing for this technology – especially from Taiwan Semiconductor Manufacturing Company (TSMC) in Taiwan – in the wake of the ongoing geopolitical tensions with China and the ongoing chip shortage, have spurred a flurry of investment into developing its own, more robust supply chain.

In fact, the federal government is currently discussing the conveniently titled Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act, a bill that would potentially see spending of around $52 billion on the semiconductor sector as part of the wider $250 billion United States Innovation and Competition Act.

The US, however, is not alone in attempting to rapidly develop its domestic semiconductor industry. 

Since 2015, China has allocated around $180 billion to support the semiconductor industry and in the last couple of years have introduced even greater subsidies to help catch up to their international rivals. By 2025, China aims to achieve 70% self-sufficiency in ‘high-tech industries’, with analysts predicting that the country will achieve this goal for 28nm chips in 2021 and 14nm processors in 2022. 

While far from the most advanced chips on the market, it is these “workhorse chips” that are in fact the most widely used throughout the world, present in everything from cars to appliances. 

Meanwhile, Europe, with little in the way of its own domestic chip industry, finds itself caught in the middle between these two semiconductor superpowers. Earlier in the year, EU Commissioner Thierry Breton sought talks with the CEOs of Intel and TSMC Europe, hoping to entice them to build their own fabs in Europe.

Since then, Intel has announced a $20 billion ‘ecosystem-wide’ investment in Europe, though the locations in which any fabs may be built are still being decided. 

 

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