Semiconductors are seen on a circuit board.

Justin Sullivan | Getty Images

Samsung is planning to construct a $17 billion semiconductor manufacturing unit in Taylor close to Austin, Texas, over the following three years as a part of an effort to extend its manufacturing capability and alleviate the worldwide chip scarcity.

The South Korean tech large introduced the 5 million sq. meter facility Tuesday, a day after The Wall Street Journal broke the information.

The manufacturing unit will goal to assist increase manufacturing of superior logic semiconductors, that are utilized in telephones and computer systems.

“Like different chipmakers, Samsung badly wants extra capability,” Glenn O’Donnell, vp and analysis director at analyst agency Forrester, advised CNBC Tuesday. “It is following Intel, TSMC and others to construct extra manufacturing.” 

Samsung mentioned it expects constructing work to start within the first half of 2022 and it hopes to have the positioning in operation by the second half of 2024.

The complete anticipated funding of $17 billion would be the largest funding Samsung has ever made within the U.S. The determine contains buildings, property enhancements, equipment and tools.

Samsung started operations within the U.S. in 1978 and it employs over 20,000 folks throughout the nation. The newest funding will deliver Samsung’s complete funding within the U.S. to greater than $47 billion, the corporate mentioned.

O’Donnell mentioned the brand new manufacturing unit “helps develop the geographic variety from Asia,” including {that a} lack of variety was “an issue we noticed obviously because the pandemic hit.”

In February, President Joe Biden mentioned home semiconductor manufacturing is a precedence for his administration. His administration hopes to repair ongoing chip shortages and tackle lawmaker considerations that outsourcing chipmaking had made the U.S. extra susceptible to produce chain disruptions.

Kinam Kim, vice chairman and CEO of the Samsung Electronics Device Solutions Division, mentioned in an announcement that the manufacturing unit will assist Samsung to raised serve the wants of its prospects and “contribute to the soundness of the worldwide semiconductor provide chain.”

Kim added that he was grateful for assist from the Biden administration and companions in Texas.

Greg Abbott, the governor of Texas, mentioned the manufacturing unit will deliver alternatives for Central Texans and their households.

Alan Priestley, vp of rising applied sciences and traits at analyst agency Gartner, advised CNBC that Samsung already has a properly established ecosystem of companions and suppliers in Texas as a result of it already has a manufacturing unit in Austin.

“Lots of semiconductor firms have growth websites in Austin so it is a good pool of useful resource,” he mentioned.

“As with any main funding like this there have been little question native incentives (tax breaks, financing and many others) to encourage Samsung to construct in Texas,” Priestley added.

O’Donnell mentioned: “U.S. semiconductor manufacturing has waned over the previous a long time and Washington rightly sees this as a nationwide safety danger. Texas has the correct climate and geological stability for such a facility and a very good provide of tech-savvy employees.” 

Samsung’s two major rivals within the semiconductor manufacturing market are Intel and TSMC.

In March, Intel introduced that it’s spending $20 billion to construct two new chip vegetation in Arizona. Meanwhile, TSMC can be constructing a brand new manufacturing unit in Arizona.

The overwhelming majority of the world’s chips are at the moment made in Asia, with Taiwan and South Korea being explicit hotbeds of exercise. The U.S. and Europe wish to begin making extra of their very own chips.

Headquartered in Hsinchu, Taiwan, TSMC was accountable for 24% of the world’s semiconductor output in 2020, up from 21% in 2019, in accordance with the corporate.


Please enter your comment!
Please enter your name here