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Samsung Plans to Invest $200 Billion in Texas for 11 New Semiconductor Fabs

Samsung
(Image credit: Samsung)

Samsung has taken the first steps on the road towards erecting 11 new semiconductor factories in Texas. The company recently filed for 11 applications seeking tax breaks for building the facilities with the Taylor and Manor school districts. These applications, which fall within the Chapter 313 incentives program that's expiring this year, were posted Wednesday afternoon on the Texas comptroller's website, and would signify a $192 billion investment and the potential for around 10,000 jobs. 

These are numbers usually reserved for federal-government level projects, and dwarf any single Intel investment announcement. It's also four times larger a commitment than even the struggling, $52 billion United States Innovation and Competition Act (USICA) is aiming to inject on domestic manufacturing capabilities. Its languishing in congress on account of bipartisan differences has even led Intel to delay groundbreaking on its new Ohio facilities, while threatening to move to greener fields in the heart of Europe.

Samsung's plan aims to build 11 new semiconductor facilities within two decades - with the earliest of them being projected for operation in 2034. Others would only come online towards 2042. If Samsung's intention materializes, the company would be pouring $217 billion towards Texan semiconductor manufacturing infrastructure, considering its recent announcement of a $17 billion manufacturing plant in Taylor, also in the Texas. 

Of that investment, Samsung could see a $4.8 billion rebate on tax breaks alone.

"Samsung's commitment and investment in this area are in a class of their own," said Ed Latson, executive director of the Austin Regional Manufacturers Association. "We're talking about the largest foreign investment in the United States right here in our region. It's going have a dramatic impact on the economic development and growth of Central Texas."

Nine of the new facilities will be located in Taylor as well, likely taking advantage of the required infrastructure investments already required for the first such fab. The remaining two are planned for Austin, where Samsung has had a presence since 1996. Its current Samsung Austin facility is currently tasked with both CPU and DRAM production. 

If all Samsung's plans come to fruition, about 1,800 of the new jobs would be located in Austin and its $24.5 billion slice of the investment, while Taylor could see 8,200 new jobs through its $167.6 billion part. One quarter of Texas' output is already related to the semiconductor industry, and this share looks to only be going up.

Yet this is just the first step on a long, long road. Michele Glaze, a spokesperson for Samsung, clarified that filing the incentives applications is part of long-term planning for the company. 

“We currently do not have specific plans to build at this time, however, the Chapter 313 applications to the state of Texas are part of a long-term planning process of Samsung to evaluate the viability of potentially building additional fabrication plants in the United States," Glaze wrote.

Naturally, Texan infrastructure too would have to receive sizable investments to accommodate the new facilities and related requirements in terms of manpower, power delivery and assorted logistics.

Samsung Austin was in the news on January this year due to a spillage that let out 763,000 gallons (2.8 million liters) of toxic waste affecting local ecosystems. According to a report published by an Environmental Officer working for Austin City Council, the effects were so severe they resulted in "virtually no surviving aquatic life".

Samsung's investment plan comes in wake of a somewhat faltering manufacturing business unit. The NAND market has become flooded with aggressive, technologically-capable manufacturers. YMTC has announced its 172-layer 3D NAND tech, Micron also recently disclosed its new 232-layer solutions, all while Kioxia mulls the 7-bit-per-cell route for a dramatic increase in NAND density.

Macroeconomics aren't helping either, as the PC market is expected to shrink year-over-year compared to 2021, leading to unsold inventory and forcing manufacturers to cut prices in order to move stalled products.

Francisco Pires
Francisco Pires

Francisco Pires is a freelance news writer for Tom's Hardware with a soft side for quantum computing.

  • InvalidError
    I hope Samsung's Texas plans include building its own solar and wind farm to power that stuff to get around the unreliable power grid and a water pipeline from the Mexico Gulf to avoid shutting down from water shortages.
    Reply
  • purple_dragon
    Unfortunately, solar and wind alone wouldn't be a reliable enough source of electricity to power that many fabs.
    Reply
  • patrick47018
    InvalidError said:
    I hope Samsung's Texas plans include building its own solar and wind farm to power that stuff to get around the unreliable power grid and a water pipeline from the Mexico Gulf to avoid shutting down from water shortages.
    *Nuclear
    Reply
  • kjfatl
    This seems like a great strategy for Samsung. Fabs in Taiwan and South Korea have the same issue. If a conflict arises between China and any western nation (including Australia and New Zeeland) the fabs near China will most likely be shut down or severely damaged. This current weakness actually makes conflict with China and North Korea more likely. By moving significant production to the US, they have a stable area to operate their fabs for decades and the chances of the Chinese stealing their IP and technology is significantly reduced. This also protects them is North Korea starts firing artillery across the border at the fabs.

    Knowing Samsung, their plans most likely include company owned nuclear power stations with solar backup. The power plants will be profitable on their own.
    Reply
  • watzupken
    kjfatl said:
    This seems like a great strategy for Samsung. Fabs in Taiwan and South Korea have the same issue. If a conflict arises between China and any western nation (including Australia and New Zeeland) the fabs near China will most likely be shut down or severely damaged. This current weakness actually makes conflict with China and North Korea more likely. By moving significant production to the US, they have a stable area to operate their fabs for decades and the chances of the Chinese stealing their IP and technology is significantly reduced. This also protects them is North Korea starts firing artillery across the border at the fabs.

    Knowing Samsung, their plans most likely include company owned nuclear power stations with solar backup. The power plants will be profitable on their own.
    But you fail to realise that quite a fair chunk of raw material comes from US’ “unfriendly nation” list. So while you have a lot of fabs in US, the interruption in supply will negate the benefits. Again, you don’t produce chips from thin air. Assuming you managed to produce enough chips, there are many other components to make a PC work. Again, a lot are still produce in China. So in my opinion, as long as these conflicts continue, production of any goods will be impacted.
    Furthermore, this is the same Texas where power infrastructure is unreliable, particularly during winter period. Nuclear could be a way to obtain more reliable power source, but there are repercussions and other considerations as well. Nuclear plants if I am not wrong has a limited lifespan, and you need to “clean up” after it expires. It’s not as easy as blowing up the building and burying everything in the sand before building another.
    Reply
  • InvalidError
    watzupken said:
    Nuclear plants if I am not wrong has a limited lifespan, and you need to “clean up” after it expires.
    There is no definitive number on how long nuclear plants can last as long as there are no major incidents to ruin them. At least 15 nuclear plants in the USA are in the process of getting approval for license extensions that would push them beyond 80 years.
    Reply
  • edzieba
    watzupken said:
    But you fail to realise that quite a fair chunk of raw material comes from US’ “unfriendly nation” list. So while you have a lot of fabs in US, the interruption in supply will negate the benefits.
    The raw materials and mines exist elsewhere to, they are just not operating due to lower profitability. Like with encouraging chip fabs to return to the US through front-loaded investment, the same can be done with raw material mining.
    Reply
  • jkflipflop98
    purple_dragon said:
    Unfortunately, solar and wind alone wouldn't be a reliable enough source of electricity to power that many fabs.

    That would depend entirely on how many panels you install.
    Reply
  • Eximo
    Clean up of old Nuclear sites also isn't that bad. Spent fuel rods will sit in the reactor for a time as they cool down. Slowly moved off to the side and eventually taken out and processed into waste. Useful elements are chemically extracted as well depending on the type of reactor. Usually some stable glass ceramic thing they end up making placed inside of a safety rated (think train wreck) sealed module, and typically stored on site since they kind of shut down the waste storage places.

    They also don't have to go full scale commercial reactor. There are a few companies pushing micro nuclear as an option. Reactors whose failure mode is "Off" and are basically self contained.

    1 MW solar panel on the roof of my office. Does about a third of our power needs on a summer's day. We average around 2 - 3 MW peak consumption. Electric buses are thirsty.
    Reply
  • 2+2
    kjfatl said:
    This seems like a great strategy for Samsung. Fabs in Taiwan and South Korea have the same issue. If a conflict arises between China and any western nation (including Australia and New Zeeland) the fabs near China will most likely be shut down or severely damaged. This current weakness actually makes conflict with China and North Korea more likely. By moving significant production to the US, they have a stable area to operate their fabs for decades and the chances of the Chinese stealing their IP and technology is significantly reduced. This also protects them is North Korea starts firing artillery across the border at the fabs.

    Knowing Samsung, their plans most likely include company owned nuclear power stations with solar backup. The power plants will be profitable on their own.
    Just like Russian aggression came,
    when the West was must energy vulnerable/dependent,
    and led by weak leadership,

    China's most strategic time for aggression,
    is before these fabs around the world go online.

    I give China 1 year.
    Reply