Report: Samsung undecided on US fab location

02 July 2021
Intel plans to build two additional fabs at its Ocotillo campus in Chandler, Arizona and will offer foundry services from these facilities. Source: Intel

While it has been reported that Samsung Electronics’ move to build a semiconductor manufacturing facility in the U.S. in Austin, Texas, the Korean electronics manufacturer is still undecided on the final destination.

Samsung has considered spending some $17 billion to build a chip plant in the U.S. and purchase 258 acres of land in Northeast Austin last October near an existing manufacturing plant, according to Austonia.

However, according to U.S. Sen. John Cornyn, R-Texas, companies such as Samsung would not consider building such fabs without funding and tax credits.

Cornyn helped spearhead the approval of Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act that recently passed the Senate and would pump $52 billion in federal investments into U.S. domestic chip manufacturing.

"China's building 17 semiconductor facilities as we speak,” Cornyn said. “The United States is seeing one built in Arizona right now by Taiwan Semiconductor. So we need to think differently about how we encourage manufacturing of this vital component of our daily life here in America."

Cornyn spoke during a media event at Samsung’s current Austin plant to discuss the passing of the CHIPS for America Act and its importance in U.S. national security, economy and job growth.

During the conference, Samsung said it has not finalized the site selection of the new plant and was waiting for incentives and tax breaks to be clarified first.

Without Samsung’s plant and others that are planned, the U.S. could continue to lag behind Korea, Taiwan and China and continue to rely on foreign manufacturing.

"If for some reason our access to the semiconductors made in Asia were cut off … as a result of a conflict or some kind of pandemic or a natural disaster, it would have dramatically bad consequences on the United States," Cornyn said.

COVID-19’s legacy

The lasting impact of the COVID-19 pandemic has companies and governments worldwide scrambling to increase domestic manufacturing to avoid the pitfalls of semiconductor manufacturing aggregation being located primarily in Asia.

After the initial shock of lockdowns and stay-at-home orders, the semiconductor supply chain struggled to get back on track with numerous markets including the automotive sector that was especially hit hard and continues to impact the sector with many automotive OEMs expecting to suffer a loss in revenue this year as they are unable to manufacture as many cars as they normally would.

In the U.S., CHIPS for America Act would give extra incentives to domestic chip companies as well as foreign investments to build fabs in the country. Taiwan Semiconductor Manufacturing Co. (TSMC) started construction of its new fab site in June and plans to spend initially $12 billion on the factory but it may spend up to $35 billion to build a gigafab depending on incentives, according to reports.

Intel has also pledged to build two new fabs at its Ocotillo campus in Chandler, Arizona. Intel is investing $20 billion in the fabs as well as an additional $3.5 billion to expand its New Mexico operations for advanced chip packaging technologies.

GlobalFoundries has pledged $1.4 billion to increase output at its three factories in the U.S., Singapore and Germany. The company also recently purchased about 55 acres of undeveloped land adjacent to its Fab 8 facility in Malta, New York.

The European Union has set a goal to produce 20% of the world’s chips by 2030 and is upping its incentives for semiconductor vendors to build fabs there with Germany recently trying to woo Intel to build a new factory in the state of Bavaria.

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