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Friday, December 3, 2021

Samsung Selects Texas City for $ 17 Billion Semiconductor Plant to Create Over 2,000 Jobs

Samsung announced Wednesday that it has selected Taylor, Texas for its $ 17 billion state-of-the-art chip factory, which is expected to create 2,000 high-tech jobs.

“The new manufacturing facility will produce advanced logic chips that will be used in next-generation devices for applications such as mobile devices, 5G, high-performance computing (HPC) and artificial intelligence (AI),” said Texas Gov. Greg Abbott. Press release.

Construction is expected to begin in the first half of 2022 and production in 2024, creating at least 6,500 construction-related jobs.

The project will be Samsung’s largest investment in the country and the largest FDI record in Texas.

Samsung Electronics Co. Ltd. will amount to more than 5 million square meters. Taylor was selected for its proximity to Samsung’s existing Austin facilities, as well as urban infrastructure and the local semiconductor ecosystem.

In addition to 2,000 jobs, the plant will also support thousands of indirect jobs. A $ 27 million grant was provided by Samsung from the Texas Enterprise Fund to support local job creation.

“Samsung’s new Taylor semiconductor plant will open up countless opportunities for hardworking Central Texas residents and their families, and play an important role in preserving our state’s exclusivity in the semiconductor industry,” Abbott said.

Samsung has invested a total of $ 35 billion in Texas and $ 47 billion in the United States in this plant since 1996.

The three largest chip manufacturers in the world are Intel, Samsung, and Taiwan Semiconductor Manufacturing Co. (TSMC) topping the list. Along with Samsung, Intel and TSMC are investing heavily in global manufacturing facilities to meet the post-pandemic surge in demand that has maximized global capacity. Chips are needed in everything from computers and home devices to cars, and the current shortage is expected to last for a while.

“By increasing our manufacturing capacity, we can better meet the needs of our customers and contribute to the stability of the global semiconductor supply chain,” said Kinam Kim, vice chairman and general manager of Samsung Electronics Device Solutions, in a statement.

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As an incentive to select Taylor, the local government will waive 90 percent of property taxes for ten years and 85 percent for the next 10 years. Samsung’s investment is expected to receive further tax cuts as the plant is located in the Federal Opportunity Zone.

Given this business move, Taylor and Texas are now at the forefront of an industry that is growing in geopolitical importance. “The significance of this facility extends far beyond Texas,” Abbott said at a news conference. “It will affect the whole world.”

In the past, manufacturing has always focused on Asia in search of low-cost economic benefits. But recent chip shortages have exposed vulnerabilities in the global supply chain and the need for diversification. Supply chain disruptions have led to severe safety concerns, billions in lost revenue for global manufacturers, and forced factories to lay off workers.

The White House also called for the urgent passage of the CHIPS bill, a $ 52 billion bill in the House of Representatives. The CHIPS Act focuses on funding semiconductor research and manufacturing in the United States.

“Increasing domestic production of semiconductor chips is critical to our national and economic security,” US Commerce Secretary Gina Raimondo said Tuesday.

Samsung’s announcement follows Texas Instruments’ announcement that the company plans to invest $ 30 billion in a Sherman, Texas-based semiconductor wafer plant, creating 3,000 new jobs.

In addition, GlobalFoundries, an international contract semiconductor manufacturer, is increasing investment in upstate New York, while TSMC plans to invest nearly $ 100 billion over three years to modernize its global manufacturing facilities, including $ 12 billion in Arizona.

Analysts predict that Samsung will produce advanced chips with a resolution of 5 nanometers or less in the new plant in addition to its advanced logic chips. The chips will be manufactured for customers like Qualcomm and will be capable of handling more data per unit area than the 14- and 28-nanometer chips currently being manufactured in Austin.

Samsung currently employs over 20,000 people in the United States.

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