Samsung's US Austin Factory Shutdown 'Prolonged'... "Time Needed Until Resumption"

Damage Scale Increasing... Restart Expected to Take Several Months

[Asia Economy Reporter Jeong Hyunjin] "Samsung Electronics' Austin plant has not resumed normal operations and will not do so before the weekend."

A Samsung Austin plant official told a local media outlet in Austin, Texas, on the 4th (local time) that this was the case. The plant shutdown, which began on the 16th of last month due to power outages caused by record-breaking cold weather in the U.S., has continued for nearly 20 days, but there is no immediate timeline for resuming operations. Similarly, Dutch semiconductor company NXP, which also halted operations at a nearby plant, stated, "It is currently difficult to predict when operations will resume."

According to local media such as the Austin Business Journal on the 6th, Samsung Electronics, NXP, and German company Infineon have all currently suspended operations at their Austin plants. Although power and water supplies, which caused the plant shutdowns, have been restored, inspections and other processes are taking time, delaying the restart of operations and increasing the scale of damage.

Considering that Samsung Electronics' Austin plant had an average daily sales of approximately 10.7 billion KRW last year, the estimated damage from the plant shutdown so far is about 200 billion KRW. Kim Yangjae, a researcher at KTB Investment & Securities, recently stated, "It will take another 2 to 3 months to resume semiconductor production after equipment restoration," and projected, "Assuming normal operations resume around May, losses of about 1 trillion KRW will occur."

The entire city of Austin is inevitably affected as well. Listo Puhaka, chairman of semiconductor market research firm VLSI Research, estimated that Samsung Electronics, NXP, and other semiconductor plants in Austin generated monthly sales of 500 million USD (approximately 560 billion KRW), but with operations halted, losses have already exceeded 250 million USD. He mentioned that to restart the plants, damaged parts caused by heavy snow must be repaired, numerous pieces of equipment that process semiconductor wafers must be re-inspected, and the entire system must be tested before full operation.

Consequently, even if operations begin immediately, it is expected to take several months to fully recover to normal production levels. Samsung Electronics responded, "We are making efforts to resume operations as soon as possible, but more time will be needed to refurbish and inspect the facilities to reach normal levels." NXP also stated, "We are inspecting products, equipment, and systems to resume operations as soon as possible," adding that more time will be required for this process.

Meanwhile, as the Austin plant shutdown prolongs, attention is focused on whether this will affect Samsung Electronics' decisions regarding new or expanded semiconductor plants in the U.S. Samsung Electronics has already submitted documents to local governments in Texas and other states, indicating plans to invest a total of 17 billion USD, including 5.069 billion USD for plant construction and facility investment and 9.931 billion USD for advanced equipment purchases, while requesting tax incentives. Currently, expansion of the Austin plant appears likely, but Samsung Electronics has also stated that it is considering two locations in Arizona and one in New York.