Samsung To Build $17bn Chip Factory In Texas, Amid Global Shortage

South Korean electronics giant Samsung Electronics has confirmed the location for its largest ever financial investment into the United States.

Samsung announced that it would build a new $17bn (£12.7bn) semiconductor manufacturing factory in Taylor, Texas.

The decision to opt for Taylor in Texas, should not come as a surprise. In March this year Samsung said it was considering four locations in Arizona, Texas and New York.

Tax breaks

But in September this year, Taylor in Texas became the favourite when it offered generous tax incentives to help sway the decision in its favour.

Samsung is the world’s biggest memory chipmaker and second-largest contract chip manufacturer, and the new facility will produce “advanced logic devices” for Samsung’s chip contract manufacturing business.

Samsung already has a chip plant in Austin (Texas), which was knocked offline for a number of weeks earlier this year, after the severe winter storm in Texas caused widespread electricity and water shortages.

But the proposed factory in Taylor will be much bigger.

Taylor is located about 25 miles (40 kilometres) from Austin.

It was previously reported that the city of Taylor offered extensive property tax breaks to Samsung, as well as a 92.5 percent tax waiver on new property built on the site for 10 years and the repayment of development review costs.

Separately, a statement from the governor’s office said Samsung would get a $27m grant for creating jobs in the state.

New factory

In its announcement, Samsung said the new facility will “manufacture products based on advanced process technologies for application in areas such as mobile, 5G, high-performance computing (HPC) and artificial intelligence (AI).”

It comes amid an ongoing global chip shortage that continues to impact multiple industries.

“As we add a new facility in Taylor, Samsung is laying the groundwork for another important chapter in our future,” said Kinam Kim, vice chairman and CEO, Samsung Electronics Device Solutions Division. “With greater manufacturing capacity, we will be able to better serve the needs of our customers and contribute to the stability of the global semiconductor supply chain.”

“We are also proud to be bringing more jobs and supporting the training and talent development for local communities, as Samsung celebrates 25 years of semiconductor manufacturing in the US,” Kim said.

“In addition to our partners in Texas, we are grateful to the Biden Administration for creating an environment that supports companies like Samsung as we work to expand leading-edge semiconductor manufacturing in the US,” continued Kim. “We also thank the administration and Congress for their bipartisan support to swiftly enact federal incentives for domestic chip production and innovation.”

Groundbreaking for the new factory will begin in the first half of 2022 with the target of having the facility operational in the second half of 2024.

The Taylor factory will apparently span more than 5 million square meters and is expected to serve as a key location for Samsung’s global semiconductor manufacturing capacity along with its latest new production line in Pyeongtaek, South Korea.

The total expected investment of $17 billion, will bring Samsung’s total investment in the US to more than $47 billion since beginning operations in the country in 1978, where the company now has over 20,000 employees across the country.

“Companies like Samsung continue to invest in Texas because of our world-class business climate and exceptional workforce,” said Governor Abbott. “Samsung’s new semiconductor manufacturing facility in Taylor will bring countless opportunities for hardworking Central Texans and their families and will play a major role in our state’s continued exceptionalism in the semiconductor industry.”

The new facility is expected to create over 2,000 high-tech jobs directly, as well as 6,500 construction jobs.