Samsung Electronics Co. has finally decided on a location to build its $17 billion semiconductor manufacturing fab.
According to the Wall Street Journal, the Korean electronics giant has chosen Taylor, Texas, a city about 30 miles from its existing manufacturing hub in Austin, as the location.
The plant will continue the U.S. push to grow its domestic semiconductor manufacturing as the COVID-19 pandemic showed companies and the government that aggregation of chipmakers in few locations leads to issues with the supply chain, including the ongoing chip shortage and current and potentially future geopolitical issues.
As a result, the U.S. government plans to boost domestic chip manufacturing with the Senate passing the United States Innovation and Competition Act (USICA), which includes funding for Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act, a bill that would help to increase U.S. domestic semiconductor manufacturing.
The bipartisan bill, introduced by Chuck Schumer (D-New York) and Todd Young (R-Indiana), aims to enhance competitiveness in the U.S. by promoting American science and technology leadership.
Funding of the CHIPS for America Act would include $52 billion in federal investments for domestic semiconductor research, design and manufacturing provisions.
Samsung is the world’s largest chipmaker by capacity with an installed capacity around 3.1 million 200 mm equivalent wafer starts per month, according to IC Insights. However, much of that capacity is dedicated to dynamic random-access memory (DRAM) and NAND memory. Samsung is currently the world’s second largest maker of chips by revenue and the fourth foundry by installed capacity.
The new fab will augment its U.S. domestic presence in Austin, where Samsung invested about $17 billion to date and supports about 3,000 employees and manufactures state-of-the-art semiconductors.
The move may be part of Samsung’s goal to increase foundry production capacity by three times by 2026 to meet growing demand for semiconductors. Over the next decade, global demand for chips is expected to rise 5% due to their higher level of inclusion in the automotive industry, internet of things, consumer electronics and more.
The foundry will be one of many new fabs that are being built in the U.S. in the coming years including two new fabs by Intel at its Ocotillo campus in Chandler, Arizona. The company just broke ground on the fab in September and already signed up Amazon and Qualcomm as its first customers for its new foundry business.
Foundry leader TSMC has plans of its own and will invest a reported $100 billion over the next three years to add to capacity. The company announced it will build a new fab in Arizona and Japan as well as a new 2 nm fab in Hsinchu, Taiwan, and a second facility in Koahsiung, Taiwan.