Samsung is planning to build a $17 billion chip plant in Texas

November 25, 2021: -Samsung is to build a $17 billion semiconductor factory in Taylor near Austin, Texas, more than the coming three years as part of an effort to increase its manufacturing capacity and alleviate the global chip shortage.

The South Korean tech giant is announcing the 5 million square meter facility Tuesday after The Wall Street Journal broke the news.

The factory will help boost the production of advanced logic semiconductors, which are used in phones and computers.

“Like the chipmakers, Samsung badly needs more capacity,” Glenn O’Donnell, vice president, and research director at analyst firm Forrester, told CNBC.

Samsung said it is expecting building work to commence in the first half of 2022, and it is hoping to have the site in operation by the second half of 2024.

The total investment expected of $17 billion will be the most significant investment Samsung has ever made in the U.S. The figure includes buildings, property improvements, machinery, and equipment.

Samsung started operations in the U.S. in 1978, and it employs more than 20,000 people across the country. The recent investment will bring Samsung’s total investment in the U.S. to over $47 billion, the company added.

O’Donnell said the new factory “helps expand the geographic diversity from Asia” and also said that a lack of diversity was “a problem we saw glaringly as the pandemic hit.”

In February, President Joe Biden said domestic semiconductor manufacturing is a priority for his administration. His administration hopes to fix the present chip shortages and address lawmaker concerns that outsourcing chipmaking had made the U.S. more vulnerable to supply chain disruptions.

Kinam Kim, vice chairman and CEO of the Samsung Electronics Device Solutions Division, said that the factory will help Samsung serve its customers’ needs better and “contribute to the stability of the global semiconductor supply chain.”

Kim also said that he was grateful for support from the Biden administration and partners in Texas.

Greg Abbott, the governor of Texas, said the factory would bring Central Texans and their families opportunities.

Alan Priestley, vice president of emerging technologies and trends at analyst firm Gartner, told CNBC that Samsung has a well-established ecosystem of partners and suppliers in Texas because it already has a factory in Austin.

“Many semiconductor companies have development sites in Austin, so it’s a good pool of resources,” he said.