Samsung Electronics announced today it has selected a site in Taylor, Texas, to build a new semiconductor wafer fabrication plant that is set to produce advanced logic devices.
The estimated $17 billion investment, which will mark the largest investment made by Samsung in the U.S., is expected to create about 2,000 new jobs directly and thousands of related jobs once the new facility is in full operation. The funding will bring Samsung’s total investment in the U.S. to more than $47 billion since beginning U.S. operations in 1978.
The Taylor site, about 16 miles from Samsung’s current manufacturing site in Austin, is expected to serve as a key location for Samsung’s global semiconductor manufacturing capacity along, with its latest new production line in Pyeongtaek, South Korea.
The new facility will manufacture products based on advanced process technologies such as mobile, 5G, high-performance computing (HPC) and artificial intelligence (AI).
Samsung’s decision comes amid a global chip shortage that has undermined industries from automobiles to electronics.
The company said it remains committed to supporting customers globally by making advanced semiconductor fabrication more accessible and meeting surging demand for semiconductor products.
Samsung will start construction on the Taylor site, which will span more than 5 million square meters, in the first quarter of 2022, aiming to have production up and running in the second half of 2024.
“As we add a new facility in Taylor, Samsung is laying the groundwork for another important chapter in our future,” said Kinam Kim, vice chairman and CEO of device solution division at Samsung Electronics. “With greater manufacturing capacity, we will able to better serve the needs of our customers and contribute to the stability of the global semiconductor supply chain. We are also proud to be bringing more jobs and supporting the training and talent development for local communities, as Samsung celebrates 25 years of semiconductor manufacturing in the U.S.”
After reviewing multiple locations within the U.S. for a potential manufacturing plant, the decision to invest in Taylor was based on multiple factors, including the local semiconductor ecosystem, infrastructure stability, local government support and community development opportunities.
Based on media reports, Samsung, which evaluated other locations such as Arizona, New York and South Korea for the new chip plant, picked Texas’ Williamson County because it offered a better tax policy. In July, Samsung Electronics applied for a tax break (from the Taylor Independent School District) to build a chipmaking factory in Taylor, Texas, according to a file submitted with Texas authorities in July.
“It [Samsung] seeks a strong public partner to support the project through financial and other incentives (e.g., infrastructure and utility assistance). In connection with the project, the company is seeking rebates under Chapter 380 and 381 assistance from the Texas Enterprise Fund. In addition, the company is also pursuing incentives relating to certain infrastructure and utility improvements, rate reductions, and other non-cash benefits to support construction and operations of the proposed project,” as per the document.
Samsung will also contribute financial support to create a Samsung Skills Center for the Taylor Independent School District (ISD) to help students develop future career skills and provide internships and recruiting opportunities.
“Companies like Samsung continue to invest in Texas because of our world-class business climate and exceptional workforce,” said Governor Abbott. “Samsung’s new semiconductor manufacturing facility in Taylor will bring countless opportunities for hardworking Central Texans and their families and will play a major role in our state’s continued exceptionalism in the semiconductor industry.”
"In addition to our partners in Texas, 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.," Kim said. "We also thank the administration and Congress for their bipartisan support to swiftly enact federal incentives for domestic chip production and innovation."
Samsung, one of the largest semiconductor makers in the world, said in August that it plans to invest more than $205 billion in semiconductor, bio, IT and next-generation communication networks industries over the next three years to bolster its global presence.
Samsung Group’s de facto leader Jay Y. Lee, visiting North America last week, met with the U.S. government officials in Washington, D.C. to discuss the second chip plant and semiconductor supply chain. Lee also met with other tech firm leaders, including Microsoft CEO Satya Nadella and execs at Moderna and Verizon Wireless, to strengthen their business ties.
Intel recently broke ground on two new chipmaking plants in Arizona. At the same time, TSMC started constructing a $12 billion chip factory in Arizona and announced its plan to build the first chip plant in Japan in October. Texas Instruments also unveiled its investment plan for four new semiconductor fabrication plants in Sherman, Texas.