Samsung Announces $ 17 Billion Texas Chip Factory | Technology

South Korean tech giant Samsung Electronics says it will build a $ 17 billion chip factory outside Austin, Texas to make advanced chips used in phones, cars, and more electronic appliances.

The plant would create 2,000 high-tech jobs, with construction scheduled to start in the first half of next year and production to start in the second half of 2024, Samsung said in a statement Wednesday. It would also create at least 6,500 construction jobs, Texas Gov. Greg Abbott said in a press release.

The world’s largest memory chipmaker and second-largest contract chipmaker had also considered sites in Arizona and New York for the plant, which will be much larger than its only other US chip factory in Austin. .

Samsung chose Texas again because of its infrastructure, government support and proximity to its existing factory, he said.

A chip shortage has become both a trade barrier and a serious national security concern for the United States. The semiconductor shortage triggered by COVID-era shutdowns has hampered the production of new vehicles and electronics for more than a year.

New economic and national security issues are also at stake as many American companies depend on chips produced abroad, notably in Taiwan, which China has long claimed as its home territory.

“It’s a concentration risk, a geopolitical risk” to be so dependent on Taiwan for much of the world’s chip production, said Nina Turner, analyst at IDC. She said current shortages are likely to ease, but there will be long-term demand for crisps as more and more everyday products depend on it.

US President Joe Biden’s administration pledged billions of dollars in funding to boost chip manufacturing and research [File: Susan Walsh/AP]

Many chipmakers are expanding their manufacturing operations, now concentrated in Asia, in response to shortages, which have wreaked havoc in industries ranging from automakers to the video game industry.

Abbott, accompanied at a press conference by Samsung Vice President of Electronics Kinam Kim and U.S. Senator John Cornyn of Texas, said the company’s decision to pick Texas was a testament to the state economic environment based on low taxes, reasonable regulations and robust infrastructure. .

Texas suffered a widespread multi-day power outage last February, causing some 300-400 billion won ($ 254-339 million) in damage to Samsung’s existing chip plant in Austin.

“I am extremely confident that the power grid is stable, resilient and reliable,” Abbott said when asked about the power supply for the plant.

The new Williamson County, Texas site, which includes the town of Taylor, offered the best incentive package among sites Samsung is considering, sources told Reuters news agency.

Abbott’s office said on Tuesday that Samsung would also receive a $ 27 million grant from the Texas Enterprise Fund for its job creation. His office did not immediately respond to requests for additional details on the incentives received by Samsung.

The administration of US President Joe Biden has pledged billions of dollars in federal funding to boost chip manufacturing and research to ensure it has the edge over China in advanced technology and to remedy shortages in critical sectors such as the automotive industry.

Senator Cornyn on Tuesday called on the Biden administration to invest more money to attract chipmakers to the United States, calling it a “national security imperative.”

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“If China continues to swing, the majority of the world could be at its mercy when it comes to critical semiconductor supplies,” said Cornyn.

Samsung’s Kim, in a statement, thanked the Biden administration for “creating an environment that supports companies like Samsung as we work to develop advanced semiconductor manufacturing in the United States.”

“We also thank the administration and Congress for their bipartisan support to quickly enact federal incentives for national chip production and innovation.”

Samsung has not specified what the new plant will do beyond advanced logic chips, which can be used to power mobile devices and autonomous vehicles.

Analysts said it would likely make cutting-edge chips of 5 nanometers or less, using machines made by ASML of the Netherlands, for big customers like Qualcomm.

Such chips can handle more data per zone than the 14- and 28-nanometer chips made primarily by Samsung’s current US plant in Austin.


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