South Korean technology giant Samsung Electronics said it will spend $17 billion to build a chip factory outside of Austin, Texas, to produce advanced chips for mobile phones, automobiles and other electronic devices.
Samsung said in a statement on Wednesday that the plant will create 2,000 high-tech jobs, construction will begin in the first half of next year, and production will begin in the second half of 2024. Texas Governor Greg Abbott said in a press release that it will also create at least 6,500 construction jobs.
The world’s largest memory chip maker and the second largest contract chip maker are also considering setting up factories in Arizona and New York, which will be much larger than its only US chip factory in Austin.
Samsung chose Texas again because of its infrastructure, government support, and proximity to existing factories.
The shortage of chips has become a commercial obstacle and a serious national security issue for the United States. The shutdown in the COVID era has led to a shortage of semiconductor supplies, which has hindered the production of new cars and electronic equipment for more than a year.
New economic and national security issues are also threatened because many American companies rely on chips produced overseas, especially in Taiwan, which China has long claimed to be its territory.
IDC analyst Nina Turner said that most of the world’s chip production is so dependent on Taiwan, “this is a kind of concentration risk, a kind of geopolitical risk.” She said that the current shortage may subside, but as more and more daily products rely on chips, the demand for chips will exist for a long time.
Many chip makers are expanding their manufacturing operations and are now focusing on Asia to deal with shortages, which has an impact on industries ranging from automakers to the video game industry.
At a press conference held by Samsung Electronics Vice Chairman Kinam Kim and Texas Senator John Cornyn, Abbott stated that the company’s decision to select Texas proves that the state’s economic environment is based on low taxes. , Reasonable regulations and strong infrastructure.
Texas suffered multiple days of large-scale power outages in February last year, and Samsung’s existing chip factory in Austin suffered about 30-400 billion won (254-339 million U.S. dollars) in losses.
“I have full confidence in the stability, resilience and reliability of the grid,” Abbott said when asked about the factory’s power supply.
Sources previously told Reuters that the new site in Williamson County, Texas, including Taylor City, provides the best incentive plan among the sites Samsung is considering.
The Abbott office said on Tuesday that Samsung will also receive a $27 million grant from the Texas Enterprise Fund to create jobs. His office did not immediately respond to a request for more details about the award Samsung received.
The administration of US President Joe Biden (Joe Biden) has pledged billions of dollars in federal funding to promote chip manufacturing and research to ensure that it is superior to China in terms of advanced technology, and to address shortages in key industries such as automobiles.
Senator Corning called on the Biden administration on Tuesday to invest more money to attract chip manufacturers to the United States, calling it a “national security priority.”
“If China continues to remain vigilant, most countries in the world may be at the mercy of the supply of key semiconductors,” Corning said.
In a statement, Samsung’s Kim thanked the Biden administration for “creating an environment that supports companies like Samsung in our efforts to expand leading semiconductor manufacturing in the United States.”
“We also thank the government and Congress for their bipartisan support to quickly formulate federal incentives to promote domestic chip production and innovation.”
In addition to advanced logic chips that can be used to power mobile devices and self-driving cars, Samsung has not specified what the new plant will produce.
Analysts said it may use machines made by Dutch ASML to produce cutting-edge chips of 5 nanometers or smaller for major customers such as Qualcomm.
Compared with the 14 and 28 nanometer chips that Samsung’s existing Austin plant mainly produces, this type of chip can process more data per unit area.