Samsung Electronics picks Taylor, Texas, for big chip investment

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Samsung Electronics picks Taylor, Texas, for big chip investment

Samsung Electronics' existing chip plant in Austin, Texas [SAMSUNG ELECTRONICS]

Samsung Electronics' existing chip plant in Austin, Texas [SAMSUNG ELECTRONICS]

 
Samsung Electronics has selected Taylor, Texas, as the location for its $17 billion U.S. chip investment, a key move in the company's battle to compete with Hsinchu, Taiwan's TSMC.
 
The deal was announced Tuesday in the United States during an event attended by Texas Gov. Greg Abbott and Samsung Electronics Vice Chairman Kim Ki-nam.
 
"As we add a new facility in Taylor, Samsung is laying the groundwork for another important chapter in our future," Kim said during the event, which was held in Austin. "With greater manufacturing capacity, we will be able to better serve the needs of our customers and contribute to the stability of the global semiconductor supply chain.
 
It will be the largest single investment by Samsung Electronics in the United States, according to a statement from the company.
 
The announcement comes after months of market speculation about exactly where the plant would be located and when the company would make its decision. Another location in Texas has been under consideration, while New York state and Arizona were also mentioned.
 
Located about 50 miles from the chipmaker's existing semiconductor plant in Austin, the new factory will produce advanced system-on-chip products using extreme ultraviolet lithography.
 
Samsung Electronics stated in an application for tax incentives that the facility will be used for its foundry, or contract fabrication business and will primarily supply to large U.S. clients, including Qualcomm, Nvidia, IBM and Tesla.
 
According to a document filed with the Texas Comptroller's office, Samsung Electronics plans to break ground at the site in the first quarter of 2022 with the aim of commencing operations in the final quarter of 2024.
 
If all goes according to plan, the new factory will manufacture cutting-edge microprocessors and graphics cards critical for the operations of computers and mobile devices. The focus differs from that of the Austin factory, which opened in 1996, as the older facility fabricates chips primarily used in conventional home appliances.
 
Texas has become a leading destination for big name companies. Tesla plans to shift its headquarters from Palo Alto, California to Austin, while Hewlett Packard Enterprise and Oracle have already moved to the Lone Star State.
 
Intel and TSMC are making their own multi-billion dollar semiconductor investments in the United States and are slightly ahead of Samsung Electronics in getting their projects started.
 
Intel recently broke ground on two new chip-making plants in Arizona, projects to which it will be committing $20 billion. TSMC started construction of a $12 billion chip factory in Arizona in April and may build a chip plant in Japan jointly with Sony. 

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]
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