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November 25, 2021

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Samsung to set up US$17b microchip factory in Texas

Samsung said on Tuesday it will build a microchip factory in Texas, a US$17 billion investment that comes as semiconductor shortages are causing supply chain delays across many industries.

“Welcome to Texas, Samsung!” tweeted Texas’ Republican governor Greg Abbott, who called the planned factory “the largest foreign direct investment in Texas EVER.”

The new plant, to be operational by the end of 2024, is expected to create more than 2,000 skilled jobs and “lay the groundwork for another important chapter in our future,” said Kinam Kim, CEO of the South Korean giant’s electronics division.

The chips manufactured on the site will have applications in mobile technologies, 5G or artificial intelligence, the group said. The plant will be built in the town of Taylor, near the capital Austin.

The news was welcomed by the administration of President Joe Biden, whose economics and security advisers Brian Deese and Jake Sullivan said in a statement that the plant would go a long way to “helping protect our supply chains, revitalizing our manufacturing base, and creating good jobs right here at home.”

Samsung, the world’s biggest chipmaker, has aggressively stepped up its investment in its semiconductor business as the world battles shortages of chips that have hit everything from cars and home appliances to smartphones and gaming consoles.

Samsung joins its rivals TSMC from Taiwan and Intel of the US in expanding chip manufacturing capacity in the United States, which sees the sector as an area of strategic competition with China. TMSC and Intel are building plants in Arizona.

The two presidential advisers stressed Tuesday’s announcement was in large part the result of discussions between the heads of state of the two countries. 

The Texas plant announcement came as Lee Jae-yong, the de facto leader of the wider Samsung conglomerate, visited the United States, looking to further boost its footprint in the world’s biggest economy.  Samsung has been operating in the United States for 25 years.

Samsung has enjoyed soaring profits in recent quarters on the back of strong pandemic-driven demand for electronics and chips.




 

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