South Korea’s largest company – Samsung Electronics Co., has decided to build an advanced U.S. chip plant in Texas which is approximately 30 miles away from its existing manufacturing hub in Austin.
According to a close circle of people who are aware of the matter, Samsung and Texas will announce the decision on Tuesday afternoon. However, a Samsung representative said that there is no decision at that point and declined to give more information.
Samsung’s decision came months after Jay Y. was released from prison on parole, and it follows plans by TSMC and Intel Corp.
It is expected that more and more devices would require chips in future. That’s why the industry is trying to do its best to meet a post-pandemic surge in demand that’s stretched global capacity to the max.
Samsung’s presence is already sizable in Austin but the new plant will enlarge it. $17 billion are invested to date on a sprawling complex that houses more than 3,000 employees. It also fabricates some of the most sophisticated chips in the country. Not only that but the giant company is planning to invest another $17 billion to create about 1,800 jobs over the first 10 years.
The Asian giant is taking advantage of a U.S. government effort to counter China’s rising economic prowess. That ambition emerged after a global chip shortage tied up the tech and auto industries. That cost company billions in lost revenue and forced plants to dismiss workers.
Earlier this year, President Joe Biden laid out a sweeping effort to defend critical supply chains, including a proposed $52 billion to support domestic chipmaking. His administration has constantly voiced the need to increase chip production in the U.S. because in their opinion this was the best way to face-off with China. Democrats in the House of Representatives were called by The White House to pass a $52 billion bill, specified as the CHIPS Act which would fund domestic semiconductor research and manufacturing.
As we already know, Samsung intends to move to or expand in Texas.
In the previous year, electric carmaker Tesla Inc. stated it would move headquarters to the state, as did Oracle Corp. and Hewlett Packard Enterprise Co.
The move that Samsung is planning to take would be a win for Texas Republican Governor Greg Abbott. He has long touted the Lone Star state’s business-friendly tax policies and is gearing up for a re-election battle next year.
Samsung aims to mass-produce 3-nanometer chips via so-called Gate All Around technology around 2022 that can control current flows across channels, shrink chip areas and lower power consumption.