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Samsung Selects Texas to Build $ 17 Billion New Chip Factory

Samsung said it has selected Taylor, Texas as the site for a new $ 17 billion (roughly Rs 1.26,480) plant to manufacture advanced chips for functions such as mobile communications, 5G, high performance computing and artificial intelligence.

According to the South Korean tech giant, the plant will create 2,000 high-tech jobs with construction starting in the first half of next year and production in the second half of 2024. It will also create at least 6,500 construction jobs, according to Texas Gov. Greg Abbott.

The world’s largest memory chip maker and the world’s second largest contract chip maker has also considered building a plant in Arizona and New York that will be much larger than its only other U.S. chip maker in Austin, Texas.

The company said it chose Texas based on factors such as infrastructure stability, government support and proximity to an existing facility.

Samsung is joining rivals TSMC and Intel in the race to expand contract chip manufacturing in the United States, where the sector is seen as an area of ​​strategic competition with China.

The administration of US President Joe Biden has pledged billions of dollars in federal funding to stimulate chip manufacturing and research to provide an edge over China in advanced technology and address shortages in critical industries such as automobiles.

“Securing America’s supply chains is a top priority for President Biden and his administration,” National Economic Council director Brian Dees and national security adviser Jake Sullivan said in a statement, welcoming Samsung’s investment.

“We will continue to use every tool and opportunity to invest in our sources of strength such as manufacturing and technology.”

Abbott, accompanied by Vice Chairman of the Board of Samsung Electronics Kinam Kim and US Senator John Kornin of Texas, said the company’s decision was a testament to the Texas economic environment, based on low taxes, sound regulation and reliable infrastructure.

Last winter, Texas was hit by a multi-day and widespread power outage, causing about 300 billion won (roughly Rs 1,880) – 400 billion won (roughly Rs 2,510) in damage to Samsung’s existing chip factory in Austin, Texas.

“I am absolutely confident that the power grid is stable, resilient and reliable,” Abbott said Tuesday when asked about the plant’s power supply.

Sources previously told Reuters that the new Williamson County facility in Texas, which includes the city of Taylor, offers the best incentive package Samsung has considered.

National security

Senator Cornin on Tuesday called on the Biden administration to invest more money in attracting chipmakers to the US, calling it a “national security imperative.”

“If China continues to rattle its weapons, most of the world will be at their mercy when it comes to supplying critical semiconductors,” said Kornin.

Samsung’s Kim thanked the Biden administration for “creating an environment that supports companies like Samsung as we work to expand cutting-edge semiconductor manufacturing in the US.”

“We also thank the administration and Congress for their bipartisan support in rapidly enforcing federal incentives for domestic chip manufacturing and innovation.”

Samsung did not specify what the new plant will be producing other than advanced logic chips that can be used to power mobile devices and autonomous vehicles.

Analysts said the company is likely to produce cutting-edge chips of 5nm or less, using machines made by Dutch ASML, for large customers such as Qualcomm. Such chips can process more data per unit area than 14- and 28-nanometer chips, which are mainly manufactured by Samsung at Samsung’s American plant in Austin.

Taylor, located about 40 kilometers from Austin, is more than 5 million square meters, according to Samsung.

Samsung Electronics Vice Chairman Jay Y. Lee met with White House officials as well as executives from companies including Google Alphabet, Amazon and Microsoft during a trip to the United States last week.

© Thomson Reuters 2021



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