[EXCLUSIVE] Samsung adds new building to $17 billion Taylor plant

Industry

Published: 20 Nov. 2023, 07:06 Updated: 20 Nov. 2023, 13:36

[EXCLUSIVE] Samsung adds new building to $17 billion Taylor plant

Samsung Electronics' new chip fabrication plant under construction in Taylor, Texas [KYUNG KYE-HYUN'S INSTAGRAM ACCOUNT]

Samsung Electronics is adding a 2.7 million square foot building to its $17 billion chip plant in Taylor, Texas, after sealing a series of AI chip deals to be manufactured at the U.S. site currently under construction.

The city of Taylor has designated a local engineering company to roll out development review and inspection services for a new building dubbed "Samsung Fabrication Plant 2" in the city, according to a document filed on the city's website.

“The City entered a development agreement with Samsung that requires the City to designate resources and create expedited processes for review, approval and inspection services related to site development and building construction activities," the document read.

"Samsung Austin Semiconductor intends to build a second fabrication plant with approximately 2.7 million square feet (61 acres) of final build out on the southwest side of the City of Taylor."

The second fabrication plant is part of the $17 billion project announced by Samsung Electronics in 2021 which broke ground last year with a target of starting operations in 2024. The amount of investment is said to have risen to $25 billion due to the increased cost of raw materials and construction, according to the city and media outlets.

"[Samsung Fabrication Plant 2] refers to an extension of the Samsung project currently in progress in the City of Taylor," confirmed an official from the Taylor city government, adding that it is a new building.

"It would increase the capital investment in the City of Taylor and Williamson County."

The purpose of the new building has not been confirmed as Samsung Electronics declined to comment on the agenda.

"The new building could be housing a portion of the chip fabrication line or it could be housing maintenance facilities," a source from the chip industry said.

Kyung Kye-hyun, head of Samsung Electronics' chip business speaks to Seoul National University students in September. [JOONGANG PHOTO]

Samsung Electronics chose the U.S. site with the aim of capitalizing on its proximity to the headquarters of big potential clients like Tesla.

Last year, the Korean chipmaker submitted a tax break application for 11 more fabrication plants with the state of Texas, pledging to make an investment of $192.1 billion throughout the next 20 years. Samsung said it is part of the long-term plan and did not guarantee that all of them will actually get built.

Samsung Electronics wants to catch up with TSMC, the global No. 1 player in the contract manufacturing business.

Samsung Electronics grabbed 11.7 percent of the contract chip manufacturing market in the second quarter this year whereas TSMC stood firmly on top with 56.4 percent, according to TrendForce data.

Kyung Kye-hyun, head of Samsung Electronics’ chip business, said in May that it would catch up with TSMC within five years.

Its Taylor factory currently under construction has already grabbed two major clients this year ahead of its target operation time slated for next year.

In August, Samsung announced a partnership with American AI chip designer Groq, saying it would mass produce its chips on its 4-nanometer technology by the end of 2024 in Taylor.

It also forged another partnership with Canadian chip designer Tenstorrent soon after.

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]