Samsung Electronics Commits $40 Billion Investment in the US
New Taylor Plant and Expansion of Austin Facility
Introducing R&D and Advanced Packaging Facilities
Foresees 2nm Leading-Edge Competition with TSMC in the US
Samsung Electronics will receive $6.4 billion in subsidies from the United States and invest over $40 billion. In addition to the previously announced investment in a foundry (semiconductor contract manufacturing) plant, the company plans to build additional production facilities and introduce packaging and research and development (R&D) facilities. As Taiwanese foundry competitor TSMC has announced mass production of 2㎚ (1㎚ = one billionth of a meter) in the U.S., Samsung Electronics will also join in, intensifying advanced process competition locally amid growing demand for artificial intelligence (AI).
Samsung Electronics to Receive $6.4 Billion and Invest Over $40 Billion
On the 15th (local time), the U.S. government announced it will provide Samsung Electronics with $6.4 billion in subsidies under the CHIPS and Science Act (CSA). The CSA is a $52.7 billion law enacted in 2022 to support companies investing in semiconductors in the U.S. through subsidies and R&D funding.
According to the U.S. government, Samsung Electronics will invest more than $40 billion locally by 2030 based on the subsidies. Following the foundry plant currently under construction in Taylor, Texas, with an investment of $17 billion, the company plans to introduce additional plants in the area. It also plans to unveil advanced packaging facilities and R&D centers. The foundry production facilities previously operated in Austin, Texas, will also be expanded.
Samsung Electronics will mass-produce 2㎚ processes in addition to the previously announced 4㎚ process at the foundry production facilities in Taylor. The plant currently under construction is scheduled to begin full operation in 2026, and the second plant will start in 2027. Through the R&D facilities, advanced technologies for next-generation process implementation will be developed. Advanced packaging facilities will produce 2.5D and 3D-based high-bandwidth memory (HBM).
Regarding the Austin production facilities, the plant size will be increased to support key U.S. industries such as aerospace, defense, and automotive. The U.S. government explained that it will be used as a mass production base for custom chips tailored to the U.S. defense and security-related departments.
Kyung Kye-hyun, President of Samsung Electronics' Device Solutions Division, said, "Samsung Electronics is not only expanding production facilities in the U.S. but also strengthening the regional semiconductor ecosystem and shifting the U.S. into a global semiconductor production hub."
He added, "To respond to the increasing demand from U.S. customers for future products such as AI semiconductors, Samsung Electronics' production facilities will be based on advanced process technology," and "It is expected to help enhance the security of the U.S. semiconductor supply chain."
In addition to the $6.4 billion subsidy, Samsung Electronics plans to apply to the U.S. Treasury Department for additional tax credits locally.
Samsung Electronics to Compete in 2㎚ Through U.S. Investment
The subsidy Samsung Electronics receives in the U.S. is the third largest among U.S. semiconductor companies, following Intel ($8.5 billion) and TSMC ($6.6 billion), based on pure subsidies excluding loan support. Looking at the subsidy-to-investment ratio, Samsung Electronics is at 14%, TSMC at 10.2%, and Intel at 8.5%. It is predicted that the high trust from the U.S. government and the Korea-U.S. relationship positively influenced Samsung Electronics' subsidy negotiations.
In fact, U.S. President Joe Biden emphasized, "Samsung Electronics' announcement of investment in the U.S. is another example showing that my American investment agenda and the Korea-U.S. alliance are creating opportunities across the U.S." He also evaluated, "(The facilities Samsung Electronics will introduce) are essential for advanced technologies such as AI and will support the production of the world's most powerful chips that strengthen national security."
The industry is paying attention to Samsung Electronics concretizing its advanced foundry business plans in the U.S. as the 2㎚ era approaches. The U.S. is home not only to big tech companies but also major fabless (semiconductor design specialized) companies such as Nvidia and AMD. There are also AI semiconductor startups expected to grow in size. As demand for advanced processes grows due to the recent AI effect, securing orders in the U.S. can directly translate into competitiveness in the foundry business.
Samsung Electronics and TSMC will begin 2㎚ mass production from next year and will intensify the 2㎚ competition through production facilities to be introduced in the U.S. Intel has already announced mass production of the 2㎚-class 20A (angstrom; 1A = 0.1㎚) process this year. The industry expects intensified advanced foundry competition in the U.S., home to big tech and major fabless companies.
U.S. Aims to Secure Semiconductor Manufacturing Leadership Through Subsidies
The U.S. expects that by 2030, 20% of the world's advanced logic chips will be produced domestically through large-scale subsidies to semiconductor companies including Samsung Electronics. Since the U.S. is competing with China in the semiconductor field, its main goal is to expand the domestic advanced semiconductor supply chain as part of its economic and security strategy.
The U.S. government expects that Samsung Electronics' investment will create more than 17,000 jobs in the construction sector in Texas within the next five years and over 4,500 high-wage manufacturing jobs. Additionally, $40 million of the subsidies Samsung Electronics receives will be used for semiconductor workforce training, which is also expected to help revitalize the local economy.
Gina Raimondo, U.S. Secretary of Commerce, said, "The semiconductors Samsung Electronics will manufacture in Texas will be critical components in advanced technologies ranging from AI to high-performance computing (HPC) and 5G," adding, "We believe that financial support will help the U.S. grow its leadership in semiconductor manufacturing on the global stage."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
