Samsung picks Texas for new $17bn chip manufacturing plant

Image source, EPA

Samsung has chosen a site close to the city of Taylor in Texas for its new $17bn (£12.7bn) computer chip plant, amid a global shortage of semiconductors.

It’s the largest US-based investment by a South Korean electronics company.

It is estimated that the plant will create approximately 2,000 tech industry jobs. Construction should begin early next year.

Samsung, along with many other rivals is trying to grow chip production in the US, as a way to solve supply chain issues.

Kinam Kim, the chief executive officer of Samsung Electronics Device Solutions, stated that “With increased manufacturing capacity we will be in a better position to serve our customers and contribute towards the stability of global semiconductor supply chains.”

It is anticipated that the plant will be fully operational in the second half 2024.

This comes at a time when US President Joe Biden is pushing chip companies to increase production in the US.

Officials at the White House stated that this new facility will help to “protect our supply chain, revitalise and create good job opportunities”

Gina Raimondo, US Commerce Secretary said that increasing domestic production is crucial for national and economic security.

Greg Abbott, the Republican Governor of Texas, posted a tweet saying “Welcome Texas Samsung!”He posted photos of the event to announce his plans.

The BBC does not have any responsibility for external websites’ content.Original tweet available on Twitter

In separate news, the governor’s office stated that the $27m grant will be awarded to the company in order to create jobs within the state.

The new facility’s chips will be used for a variety of technology, including 5G mobile and high-performance computing, as well as artificial intelligence.

Samsung has more than 22,000 employees in the US and is the biggest chipmaker on the planet.

According to the company, the investment total in the largest economy of the world has risen to $47bn with the announcement.

There is a global shortage of chip

Global shortages of chip technology have caused major disruptions in the manufacturing industry, from automakers having to cease production to Apple warning about delayed iPhone deliveries.

Earlier in the year, TSMC, a Taiwanese chipmaker announced a $100bn Arizona investment. GlobalFoundries, meanwhile announced that they will be increasing their investment in New York State.

Problems in global supply chains have particularly hit chip industries.

Additional environmental challenges have also affected production. To make chips you need lots of water. Taiwan is experiencing drought. [a global leader in chip manufacturing]It hasn’t made a difference.

A power cut in Texas also occurred last winter and shut down Texas production temporarily. Texas is home to the majority of US’ chip industries.

Joe Biden who is trying to boost chip production in the US by generous subsidies will welcome this development.

This is not a quick solution. It takes time to build chipmaking plants. This project won’t be completed by next year, and chips won’t begin to be produced until 2024.

Right now, the world needs computer chips. There is no short-term solution because demand far exceeds supply.


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