[why&next] Samsung’s “260 Trillion Won Texas Investment Plan” Revisited... The Dilemma of U.S. Investment Scenarios

260 Trillion Won Investment Plan Submitted in 2022
"Samsung Likely Has U.S. Investment Plans"
High U.S. Investment Costs, Yongin Cluster as a Variable
Industry: "Government Must Consider Incentives and More"

As the Donald Trump administration in the United States brings the semiconductor tariff card back to the table, Samsung Electronics' "260 trillion won-scale" investment blueprint for the U.S. submitted to the state of Texas is once again drawing attention. This is because the company's official documents show both the capacity and intention for large-scale investment and expansion in the U.S. However, the dilemma surrounding the direction of these investments is growing, as the massive domestic semiconductor cluster project in Yongin has since gained momentum and the cost burden of expanding U.S. factories is considerable.

According to industry sources on January 20, Samsung Electronics submitted an application for Texas’ tax incentive program, "Chapter 313," in May 2022, presenting a mid- to long-term investment plan to create 11 new semiconductor manufacturing plants in Austin and Taylor, Texas, over the next 20 years, generating 10,000 new jobs. The documents submitted by Samsung Electronics indicated plans to build 98 new plants in Taylor and 2 in Austin, with a total investment of $192.1 billion (approximately 260 trillion won) in Texas. Given that the ongoing investment in the Taylor plant is $37 billion, this officially leaves room for even greater expansion.

At the time, the company dismissed the idea of having a specific investment plan, but this still indicated both investment capacity and mid- to long-term investment intentions. Kyung Hee-kwon, a research fellow at the Korea Institute for Industrial Economics and Trade, explained, "A company like Samsung Electronics is likely to already have long-term investment plans internally. Therefore, even if there is additional investment in the U.S., it would not come as a major shock."

The problem is that local investment in the U.S. is by no means "cheap." Memory manufacturing facilities require enormous costs and time, not only for initial construction but also for equipment installation and workforce operations. In particular, some analyses suggest that the cost structure in the U.S. is fundamentally less favorable than in Korea. According to a report published the previous day by Japanese investment bank Nomura Securities, the investment cost per facility capacity for U.S. memory plants is expected to be 20-30% higher than in Korea, with construction periods also 20-30% longer. Especially considering the relatively higher local production costs in the U.S., the production cost of U.S.-based memory plants is estimated to be at least 40% higher than in Korea.

Nomura Securities stated, "Between 2027 and 2030, the combined investment costs for Samsung Electronics and SK Hynix in the U.S. are estimated to reach 100 trillion to 120 trillion won. If Korea’s $200 billion U.S. investment fund is utilized, it could help alleviate government investment risks and the burden on memory chip manufacturers."

Furthermore, the fact that ultra-large-scale investments have also been pursued domestically since 2023 makes the choices for companies even more difficult. In 2023, domestic memory companies such as Samsung Electronics and SK Hynix formalized the "Yongin Semiconductor Cluster Project," announcing plans to establish a 300 trillion won advanced semiconductor manufacturing complex in Korea. With large-scale facility investments proceeding both domestically and internationally, the core challenge now is how to allocate limited investment resources. Some have even raised the possibility that if U.S. local investment is further increased, domestic investment plans may be partially reduced.

In this situation, with discussions about additional U.S. factory expansions or even relocating production bases outside the Yongin industrial complex, the sense of burden within the industry is growing. An industry official said, "Even if the Korean government offers various incentives to maintain domestic memory investment, if political burdens such as relocating industrial complexes are added, companies will inevitably face deeper concerns. With memory chipmakers standing at a crossroads between U.S. and domestic investments, it is time for the government to reconsider which incentives are most reasonable."