UPDATE: March 20, 2023: Samsung increased the cost of its Taylor, Texas, factory to over $25 billion last week from its originally planned $17 billion. The South Korea-based electronics company attributes the $8 billion hike to high inflation,according to Reuters.
That continues to contribute to both lingering overall materials price inflationand supply chain challenges across the construction industry.
Sources said Samsung has already spent about half of the $17 billion originally planned for the Taylor plant, according to the Reuters report.
The original story follows below.
Dive Brief:
- Samsung Electronics has tapped Mississippi-based Yates Construction as general contractor to build its $17 billion chip plant in Taylor, Texas, located about 30 miles northeast of Austin, the Austin Business Journal reported. It’s the South Korean company’s largest-ever investment made in the U.S.
- The 1,200-acre project is expected to cover 6 million square feet when completed. The company wants to break ground in 2022 in order to begin operations in the second half of 2024, according to a Samsung press release.
- Samsung said that the new factory will manufacture advanced computer chips, or advanced logic semiconductors, which are used in phones, computers, cars and other electronics.
Dive Insight:
Yates Construction has worked on massive manufacturing plant projects in the U.S. and Mexico for Volvo, Toyota and Nissan. The Samsung project will include buildings, property improvements, machinery and equipment, according to the release.
Semiconductor shortages have roiled many industries in the past year, arising from supply chain disruptions driven by the COVID-19 pandemic, and are likely to be extended by the war in Ukraine which is choking availability of key materials. Samsung is one of many companies attempting to geographically diversify its semiconductor manufacturing operations.
"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 of Samsung’s Electronics Device Solutions Division, in the press release.
President Joe Biden said in February that domestic semiconductor manufacturing is a priority for his administration, and put forward a series of federal funding and tax incentives for semiconductor manufacturing, including the $52 billion CHIPS Act, in order to spur more production in the U.S. While the CHIPS Act passed in January 2021, congress has yet to pass a bill funding its provisions. However, top Democrats said Tuesday they’re hopeful a deal could come next week.
In the meantime, other American semiconductor factory projects are moving ahead, including Texas Instruments’ build in Sherman, Texas, and Intel’s two plants in Chandler, Arizona
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