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Samsung in Texas: $ 17 billion for new chip fab

Taylor won the race: Samsung, the world’s second largest semiconductor company after Intel, will invest another 17 billion US dollars in Texas. The small town of Taylor only has around 15,000 inhabitants, but is located in the suburbs of the Texas capital Austin and only about 40 kilometers from the existing Samsung semiconductor plant, Samsung Austin Semiconductor.

A few weeks ago it was leaked that Taylor had a good chance. Yesterday confirmed Texas Governor Greg Abbott and Samsung Electronics CEO Dr. Kinam Kim’s decision.

Williamson County promises tax breaks, and Samsung also promises the infrastructure. In turn, the state of Texas is granting US $ 27 million from the Texas Enterprise Fund to create 2,000 new jobs.

Taylor, TX is a rather quiet town.

(Image: Samsung Austin Semiconductor)

The massive investment is the largest FDI in Texas to date; Samsung has invested a total of 18 billion US dollars there since 1996 and, according to its own information, has invested a total of 30 billion US dollars in the USA since 1978. So far, around 20,000 people work for Samsung in the United States.

Samsung wants to buy around 5 square kilometers of space in Taylor and start building the new chip fab in the second half of 2022. It is scheduled to start operating in 2024. Samsung is also investing huge sums in building up additional chip manufacturing capacities in Korea.

Samsung Austin Semiconductor, look at the existing fab

(Image: Samsung Austin Semiconductor)

In the cheers for the new settlement, there is no public statement about the high losses that several Texas chip fabs suffered after power outages in February 2021. Texas has low electricity prices and the highest proportion of wind power in the United States. This attracts energy-intensive companies, including Bitcoin miners: after Bitmain, which uses the site and power supply systems of a former aluminum smelter in Rockdale, Texas, is also investing there Riot Blockchain through the Whinstone division.

However, it is difficult for the local electricity supplier to buy electricity from other networks when there is a shortage. Tesla is therefore apparently expecting high returns from on-site battery storage. The GF (formerly Globalfoundries) fab in Dresden, for example, bypasses such problems own gas pits.

Texas has had problems with the water supply for years, which was discussed a few years ago in connection with a new building for the AMD company. Chip production has so far required a lot of water; however, new fabs should deal with it more efficiently. Intel even wants to manufacture “water-positive” by 2030, because water shortages are also problematic in other locations such as Arizona and Taiwan. In Texas, people mostly go by rapidly growing cities, less from industry.

Besides Samsung, Texas Instruments (TI), Infineon (ex-Cypress) and NXP also operate chip fabs in and around Austin. TI recently announced plans to invest up to $ 30 billion in new chip fabs in Sherman, Texas, near the Oklahoma border. Scarce TI chips are one of the drivers of the current chip crisis.

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