Amid a global shortage of chips used in phones, cars and other electronic devices, Samsung is planning to build a $17 billion semiconductor factory outside Austin, Texas.
Texas Gov. Greg Abbott has a press conference scheduled for Tuesday to make the economic announcement; They are expected to unveil the Samsung investment at the time, according to a person familiar with the plan, who was not authorized to speak publicly about it before the official announcement. Samsung’s announcement was first reported by South Korean news agency Yonhap.
Chip shortages have emerged as both a commercial barrier and a serious national-security concern. Short supply of semiconductors triggered by COVID-era shutdowns has hampered production of new vehicles and electronic components for more than a year. New questions of economic and national security are also at stake, as many American companies rely on chips produced abroad, especially in Taiwan.
Nina Turner, an analyst at IDC, said this is a condensation risk, a geopolitical risk of relying on Taiwan for most of the world’s chip production. He said the current shortage is likely to ease, but there will be long-term demand for chips as more and more everyday products depend on them.
Neither Samsung, a South Korean electronics giant, nor Abbott’s office this week returned a request for comment about the project.
Many chip makers are spreading their manufacturing operations, now concentrated in Asia, in response to the shortage, which has taken a toll on sectors ranging from automakers to the video game industry.
It makes sense to diversify the supply chain a bit more geographically, said Angelo Zino, an analyst at CFRA. You clearly see some new foundry capacity plans being announced in the US and Europe.
Another factor, Zino said, is the expectation that Congress will approve federal subsidies for the semiconductor industry to build its factories in the US, in the hope that it will bring jobs, ease future supply concerns and overwhelm economic rivals such as China. Will give more benefit to America. subsidized production
Samsung previously indicated that it was exploring sites in Texas, Arizona and New York for a potential new US chip plant. It has had a chip manufacturing plant in Austin, Texas since the late 1990s. But most of its manufacturing centers are in Asia.
According to the Semiconductor Industry Association, a trade group, the US share of the worldwide chip manufacturing market has declined from 37% in 1990 to 12% today. President Joe Biden’s administration is pushing Congress to pass the $52 billion CHIPS Act to increase computer chip manufacturing and research. Separate legislation is also under consideration that would create a new tax credit for investments in semiconductor manufacturing facilities.
Several chip makers have indicated interest in expanding their US operations if the US government is able to ease the construction of chip plants. Micron Technology, based in Boise, Idaho, said it will invest $150 billion globally in developing its line of memory chips over the next decade, with potential US manufacturing expansion if tax credits help make up for the high cost of US manufacturing. could. Pat Gelsinger, CEO of California-based chipmaker Intel, has urged the US to focus its semiconductor subsidies on American companies.
Intel made waves earlier this year by announcing plans to invest $20 billion in two new factories in Arizona. Even more important, Intel said it was launching a new division that would enter into contracts to make chips for firms other than its own processors. It’s a major departure for Intel, aligning it more closely with a model popularized by Taiwan Semiconductor Manufacturing Company, or TSMC, which was already building its plant in Arizona.
Samsung is the dominant player in the market for memory chips that are important for smartphones and other gadgetry, but Zino said it is expanding its role toward foundry to make chips in line with other firms.
“My expectation is that it will be foundry based in nature,” he said of the Texas plant. This is in line with their intention to triple their foundry capacity.
Other countries have made similar efforts to make chips closer to their place of use. The European Commission said earlier in November that it could approve aid for the production of semiconductors in the 27-nation bloc amid global chip shortages and intense worldwide competition to meet the need.
Williamson County officials have been working for several months on a stimulus package that will bring the Samsung Electronics plant to a rural area between the cities of Taylor and Hato that will employ about 1,800 workers.
It is now mostly agricultural row crops and grazing, said County Commissioner Ross Boles, whose campus encompasses the site. The place they are looking at has great infrastructure. It has big electricity, it has big water and it has good road system. Those nuts-and-bolts things are important to Samsung and the project.
The school board in Taylor held a meeting on November 15 to approve a system that would enable Samsung to save on taxes when building a facility within the boundaries of school districts. This was followed by tax incentives and infrastructure improvements approval from government officials in Williamson County, where Taylor is located. The site is about a 40-minute drive northeast of Austin.
According to a September proposal from county commissioners, the company plans to invest $17 billion in 6 million square feet of facilities in Williamson County by adding a $135 million ad valorem tax over a 30-year period. The document states that it can also bring in 10,000 construction works during the construction phase.
Disclaimer: This post has been self-published from the agency feed without modification and has not been reviewed by an editor
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