Samsung Delays ASML Deliveries For Texas Chip Factory – Report

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

Another worrying development for chip industry after Samsung delays delivery of ASML kit for new factory due to lack of customers

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A development this week from Samsung will again trigger concern over the current state of the global semiconductor industry.

Reuters, citing three people familiar with the matter, reported that Samsung Electronics has postponed taking deliveries of ASML chip-making equipment for its upcoming factory in Texas as it has yet to win any major customers for the project.

Last week the chip sector had been deeply shaken after Netherlands-based ASML Holdings warned that it expects net sales for 2025 to come in at the lower half of a range it had previously provided, and China sales were expected to fall in 2025 due to US export restrictions.

ASML's TWINSCAN NXE:3400B semiconductor lithography tool. ASML chip
ASML’s TWINSCAN NXE:3400B semiconductor lithography tool. Image credit: ASML

Fragile chip sector

That ASML warning showcased the fragile state of the supply chain for the global semiconductor industry, and the possible implications of Washington’s tightening restrictions on the export of advanced manufacturing tools to China.

The ASML warning pushed its share price down to their biggest one-day drop since 1998, and shares in other chip firms, including AMD, Nvidia, Intel, ARM, Broadcom and Micron, fell between 3.2 percent and 5 percent on the same day.

Now according to the Reuters report, Samsung has been also holding off on placing orders to some other suppliers for the $17 billion factory in Taylor city, prompting them to look for other customers and send staff deployed on site back home.

The delay in equipment deliveries is a fresh setback for Samsung’s Taylor project, which is at the heart of Samsung chairman Jay Y. Lee’s ambition to expand beyond its bread-and-butter memory chips into contract chip manufacturing, which is dominates by the likes of Taiwan’s TSMC.

It underscores the widening gulf between Samsung and rivals such as TSMC and SK Hynix which are ramping up production of high-end chips to cater to booming demand from artificial intelligence applications, Reuters noted.

Texas factory

In April this year, the US government had awarded up to $6.4 billion (£5.1bn) in grants to Samsung Electronics to expand its chip manufacturing facilities in Texas.

Samsung is expected to invest about $45bn in building and expanding its Texas facilities up to the end of the decade, and the US subsidy was earmarked for four facilities in Taylor, Texas, near the capital of Austin.

This includes a $17bn chip plant that Samsung had announced in 2021, a second factory, an advanced packaging facility and a research and development centre.