2024-04-05 08:08:06 ET
Samsung Electronics is poised to significantly increase its semiconductor investment in Texas, with plans to more than double its spending to approximately $44 billion, as reported by the Wall Street Journal on Friday.
The focus of Samsung’s expanded investment lies in Taylor, Texas, where the tech giant is establishing its second semiconductor hub to complement its existing operations in the region. This ambitious expansion entails the construction of a new chip manufacturing facility and a dedicated site for advanced packaging and research and development (R&D).
Samsung’s new chip factory could cost over $20 billion
Sources cited by the Wall Street Journal indicate that the cost of erecting the second chip factory in Taylor could surpass $20 billion, with the R&D activities expected to be integrated within these two facilities.
However, the exact investment figures are subject to fluctuations based on prevailing market conditions.
Part of Samsung’s investment will be allocated towards the construction of an advanced packaging plant, crucial for the production of high-end AI chips akin to those developed by Nvidia.
The projected cost for this facility is estimated to be approximately $4 billion, according to sources familiar with the matter.
Semiconductor rush in tech market
Samsung, alongside industry peers such as Intel (NASDAQ:INTC) and Taiwan Semiconductor Manufacturing (TSM), stands as one of the few companies capable of manufacturing advanced logic semiconductors vital for artificial intelligence and national defense applications.
These semiconductor manufacturers play a pivotal role in the Biden administration’s efforts to fortify the United States’ semiconductor manufacturing capabilities and mitigate China’s technological advancements in this domain.
Will Samsung get U.S. Chips Act subsidies?
To facilitate its expansive operations in Texas, Samsung is reportedly poised to receive substantial subsidies from the U.S. Chips Act.
Negotiations with the Commerce Department are ongoing, with expectations that the South Korean tech giant will secure one of the largest subsidies awarded to any single company under this initiative.
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