Texas nabs another tech titan |
South Korea’s Samsung Electronics Co. has picked Taylor, Texas to build a cutting-edge chip fabrication plant. The selection is a win for the Biden administration as it tries to boost semiconductor production at home and shore up the supply chain for American companies.
But the latest announcement won’t impact the chip crunch in the near term. Samsung’s new facility will probably only come online in late 2024, according to Jeff Pu, an analyst at Haitong International Securities Group. It’s also likely to offer advanced 4- and 5-nanometer chips, instead of the semiconductors made with mature technology that most carmakers seek in bulk quantities, Pu said.
Because of the massive manufacturing investment required, chipmaking plants are extremely expensive and slow to get off the ground. The Taylor project is part of a larger recent push by major chip companies to expand capacity, including a commitment by Samsung to spend about $205 billion over three years.
The company’s latest move is a small coup for Texas’s Republican Governor Greg Abbott, who has long touted the state’s business-friendly tax policies, and has courted controversy as he gears up for a re-election bid next year. Samsung joins a growing list of other tech giants investing there. Companies that have said they will move to Texas in recent months include Tesla Inc., Oracle Corp. and Hewlett Packard Enterprise Co.
Samsung also won’t be the first chip operation in the state. Austin is home to production facilities of several other chipmakers including Infineon Technologies AG and NXP Semiconductors NV, both of which produce automotive silicon in Texas to supply global carmakers. And Samsung’s new Taylor site is only 30 miles from its existing giant campus in Austin.
While Texas suffered extensive power outages earlier this year due to a cold snap that forced chipmakers—including Samsung—to pause operations, it’s not exactly surprising for the South Korean company to pick the Lone Star State as the site of a new plant. Wafer fabrication requires a lot of materials and machinery, and it’s best to have a fab close to a comprehensive ecosystem of suppliers.
Eventually, Samsung’s growing presence in Texas may give the state an edge over Arizona—which is home to TSMC’s $12 billion fab and Intel’s two upcoming plants. And it could help Texas become the key hub for an expanded future of U.S. chipmaking. —Debby Wu