Samsung Electronics Co., Ltd. said on Wednesday it had chosen Taylor, Texas as the location for a new $ 17 billion facility to make advanced chips for features such as mobile, 5G, high-performance computing and artificial intelligence.
The plant will create 2,000 high-tech jobs with construction to begin in the first half of next year, and production is expected to begin in the second half of 2024, the South Korean technology giant said. It would also create at least 6,500 construction jobs, Texas Gov. Greg Abbott said.
The world’s largest memory chip manufacturer and second largest contract chip manufacturer had also considered factories in Arizona and New York for the factory, which will be much larger than its only other US chip factory in Austin, Texas.
The company said it chose Texas based on factors such as infrastructure stability, government support and proximity to its existing facilities.
Samsung joins rivals TSMC and Intel in the race to expand chip contract manufacturing in the United States, where the sector is seen as an area of strategic competition with China.
US President Joe Biden’s administration has pledged billions of dollars in federal funding to increase chip production and research to ensure it has an edge over China in advanced technologies and to address critical industry deficits such as automobiles.
Welcome to Texas, Samsung!
Samsung will build a new semiconductor plant in Taylor, Texas.
➡️ $ 17 billion capital investment
➡️ Thousands of NEW jobs
The largest foreign direct investment in the state of Texas EVER. pic.twitter.com/a7VhbK3B9Q
– Greg Abbott (@GregAbbott_TX) November 24, 2021
“Securing U.S. supply chains is a top priority for President Biden and his administration,” said US National Economic Council Director Brian Deese and National Security Adviser Jake Sullivan in a statement welcoming Samsung’s investment.
“We will continue to use every tool and pursue every opportunity to invest in our strengths such as manufacturing and technology.”
Abbott, flanked by a press conference by Samsung Electronics Vice President Kinam Kim and U.S. Senator John Cornyn from Texas, said the company’s decision was proof of Texas’ economic environment built on low taxes, reasonable rules and robust infrastructure.
Texas suffered a widespread power outage for several days last winter, causing damage of about 300-400 billion won ($ 254- $ 339 million) to Samsung’s existing chip factory in Austin, Texas.
“I am extremely convinced that the power grid is stable, robust and reliable,” Abbott said Tuesday when asked about the power supply to the plant.
The new site in Texas’ Williamson County, which includes the city of Taylor, offered the best incentive package of the sites Samsung considered, sources told Reuters earlier.
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 requirement.”
“If China continues to sable-ragle, the majority of the world may be at the mercy of their mercy when it comes to supplying critical semiconductors,” Cornyn said.
Samsung’s Kim thanked Biden Administration for “creating an environment that supports companies like Samsung as we work to expand leading semiconductor production in the United States”
“We also thank the administration and Congress for their bipartisan support for the rapid introduction of federal incentives for domestic chip production and innovation.”
Samsung has not specified what the new plant will do in addition to advanced logic chips that can be used to power mobile devices and autonomous vehicles.
Analysts said it would likely make groundbreaking chips of 5 nanometers or less, using machines made by the Dutch ASML, for large customers like Qualcomm. Such chips can handle more data per area, than the 14- and 28-nanometer chips that Samsung’s existing US plant in Austin mainly manufactures.
The Taylor site, about 25 miles (40 km) from Austin, spans more than 5 million square feet, Samsung said.
Samsung Electronics Vice President Jay Y. Lee met with White House officials as well as executives of companies including Alphabet’s Google, Amazon and Microsoft during a trip to the United States last week.
(Reporting by Alexandra Alper in Washington, Heekyong Yang and Joyce Lee in Seoul, Sabahatjahan Contractor in Bengaluru and Tina Bellon in Austin, Texas; Editing by Stephen Coates)