Samsung More Than Doubles Texas Chip Plant Investment

Matthew Broersma,
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President Joe Biden speaks 20 March 2024, during an event on Intel’s Ocotillo Campus in Chandler, Arizona. Image credit: Intel

Samsung reportedly raises Texas investment to $44bn as it plans second chip plant, advanced packaging facility for AI memory

Samsung is reportedly planning to  more than double its investment in chip production facilities in Texas to roughly $44 billion (£35bn), bolstered by billions of dollars in US subsidies as the country looks to bring more cutting-edge semiconductor production within its borders.

The planned spending includes multiple facilities in and around Taylor, Texas, where Samsung is already building a $17bn cutting-edge chipmaking plant, The Wall Street Journal reported, citing unnamed sources.

Samsung broke ground on the initial plant two years ago and may begin mass production there as soon as this year.

The initial Taylor facility required $17bn in initial investments and has required billions in extra spending due to inflation and other factors, the paper reported.

Samsung announces plans for chip factory in Taylor, Texas in November 2021. Image credit: Samsung
Samsung announces plans for chip factory in Taylor, Texas in November 2021. Image credit: Samsung

Second Taylor plant

A second production plant is expected to cost more than $20bn, the paper said.

Samsung is reportedly also planning to create a reasearch and development unit that will be housed inside the two plants, and intends to build an advanced packaging facility for high-end AI chips such as those made by Nvidia.

The packaging facility reportedly has a price tag of about $4bn and is planned to carry out packaging for high-bandwidth memory (HBM), typically used alongside graphics processing units (GPUs) for AI computing.

In the HBM market Samsung competes with SK Hynix, which has an exclusive deal with Nvidia to provide cutting-edge HBM.

Subsidies

Samsung’s efforts are expected to be subsidised by billions in payouts from the US Chips Act, which became law two years ago.

The company is expected to receive one of the biggest subsidies given to a single company, the Journal reported.

The WSJ said Samsung is planning an event for 15 April in Taylor to announce its expanded investments. The company declined to comment.

The Chips Act set aside $53bn for subsidies to bring cutting-edge chip production into the US and has resulted in awards to Intel and GlobalFoundries, with TSMC and Micron also expected to receive subsidies.

Chip recovery

TSMC is building two chip factories in Arizona at a projected expense of $40bn, while Intel is investing more than $100bn in US-based chip projects in the next five years.

Samsung said it expects profits for the first quarter to rise more than 900 percent year-on-year as chip prices recover from a post-pandemic slump, due largely to demand for AI.