After a year of searching for the right place of its new U.S. fab, Samsung this week announced that it would build a fab near Taylor, Texas. The company will invest $17 billion in the new semiconductor fabrication plant and will receive hundreds of millions of dollars in incentives from local and state authorities. Separately, Texas authorities have announced that Texas Instruments intend to spend $30 billion on new fabs in the state, as well.

Samsung to Spend $17 Billion on New Texas Fab

Samsung yet has to disclose all the details about its fab near Taylor, Texas, but for now the company says that the new fab site will occupy an area of over 5 million square meters and will employ 2,000 workers directly and another 7,000 indirectly. To put the number into context, Samsung's fab near Austin, Texas currently employs about 10,000 of workers. 

Samsung will start construction of the new fab in the first half of 2022 and expects it to be operational in the second half of 2024. It usually takes about a year to construct a building for a semiconductor manufacturing facility and then about a year to install and set up all the necessary equipment.

Samsung has not announced which process technologies will be used at its fab near Taylor, Texas, but says it will produce chips for 5G, artificial intelligence (AI), high-performance computing (HPC), and mobile applications, which implies that the fab will gain fairly advanced technologies. In fact, keeping in mind that all of Samsung's nodes thinner than 7 nm rely on extreme ultraviolet (EUV) lithography, it is reasonable to expect the new fab to be EUV capable. As a result, Samsung's customers from the U.S. (such as IBM, Nvidia, and Qualcomm) will be able to produce their chips in the U.S. rather than in South Korea, which might allow their developers to address systems used by the U.S. government. 

"With greater manufacturing capacity, we will be able to better serve the needs of our customers and contribute to the stability of the global semiconductor supply chain," said Kinam Kim, Vice Chairman and CEO, Samsung Electronics Device Solutions Division. "In addition to our partners in Texas, we are grateful to the Biden Administration for creating an environment that supports companies like Samsung as we work to expand leading-edge semiconductor manufacturing in the U.S. We also thank the administration and Congress for their bipartisan support to swiftly enact federal incentives for domestic chip production and innovation."

Samsung's new semiconductor production plant will be located 25 kilometers away from the company's fab near Austin, Texas, so the facilities will be able to share infrastructure and resources (such as materials and supplies).

Samsung says that it will spend about $6 billion on construction on the building as well as improvements of the local infrastructure. Tools that will be used by the fab will cost another $11 billion. Meanwhile, to build the new plant Samsung will receive hundreds of millions in incentives from the state, the county, and the city, according to media reports. Some of the packages have not been approved yet. 

Texas Instruments to Invest $30 Billion on New U.S. Fabs

Samsung is not the only company to build new fabs in Texas. The Governor of Texas recently announced the Texas Instruments was planning to build several new 300-mm fabs near Sherman. In total, TI intends to build as many as four wafer fabrication facilities in the region over coming decades and the cumulative investments are expected to total $30 billion as fabs will be eventually upgraded.

Texas Instruments itself yet have to formally announce its investments plans, but the announcement by the governor Greg Abbot indicates that the principal decisions have been made and now TI needs to finalize the details. 

Sources: SamsungAustin American-StatesmanTexas.gov

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  • mmrezaie - Wednesday, November 24, 2021 - link

    How is it that Texas gets these fabs to move there. I would have assumed due to the weather (it is hot and humid in there), and hurricane other states might have been a better option! Can someone explain it? Reply
  • meacupla - Wednesday, November 24, 2021 - link

    If I had to guess, manufacturers built fabs there due to government subsidies and very low or non-existant regulations.

    Also, little known fact, but high tech companies were already in Austin, Texas.
    It's called "Silicon Hills", and Austin area has a surprisingly well educated work force, despite the stereotypical image of Texas.
    Reply
  • shabby - Wednesday, November 24, 2021 - link

    Was that workforce originally from Texas? Ba-dum-tsss 😂 Reply
  • FunBunny2 - Friday, November 26, 2021 - link

    "Was that workforce originally from Texas?"

    some, likely given UT, but on the whole, nope. of course, is the labor running a fab really all that high-tech? I expect no more than a drone on a Ford F-150 assembly line. and do the math: $17 Billion plus for 2,000 jobs??? talk about an out-of-control capital/labor ratio.
    Reply
  • mode_13h - Friday, November 26, 2021 - link

    According to the article, "Samsung will receive hundreds of millions in incentives from the state, the county, and the city".

    So, per hundred mil, that works out to $50k per direct job, or about $11k per direct + indirect job. Just multiply those figures by however many hundred mil of subsidies they got and decide if *that* is a good deal.
    Reply
  • Ranari - Saturday, November 27, 2021 - link

    Economics Explained (YouTube Channel) did a good video on the economy of Texas that goes over this. On the surface it seems like a poor model, but long term it works out very well for them. Reply
  • FunBunny2 - Saturday, November 27, 2021 - link

    "On the surface it seems like a poor model, but long term it works out very well for them. "

    I'm an econ, by training. the outcome of all those 'models' are predetermined, and based on 'fuzzy data' manipulated by 'fuzzy math'. remember, those are the same econs and models that have been used for decades to justify 'billionaire welfare' in support of all manner of vanity projects, like sports stadiums.
    Reply
  • The Hardcard - Wednesday, November 24, 2021 - link

    Texas is ginormous, the Austin area is far away from hurricanes and the worst humidity. Not far from dry west Texas but still access to water.

    Also, much of the semiconductor industry originated in Texas. Texas Instruments is a transistor and IC pioneer, its engineers hold a lot of first this and thats. The name is not a coincidence.
    Reply
  • FunBunny2 - Friday, November 26, 2021 - link

    " still access to water."

    not for long, unless the Colorado gets monsoon rains for years. that's the source. really, really stupid move. unless, of course, Samsung exits early.
    Reply
  • MamiyaOtaru - Friday, November 26, 2021 - link

    The Colorado River doesn't flow through Texas. It's on the wrong side of the continental divide. Reply

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