Samsung is reported to be weighing a decision to more than double its investment in its semiconductor business in Taylor, Texas, from A$25.86 billion it had committed two years ago to A$66.94 billion.
Furthermore, the Wall Street Journal added that Samsung is planning to build a second chip factory even as its first Texas-based facility which was expected to begin production this year, will now do so in 2025.
Additionally, Samsung is also exploring the option of a new facility for advanced packaging and R&D in Texas.
Samsung is one of only three companies in the world – the other two being Intel and Taiwan Semiconductor Manufacturing Company – that are capable of producing the world’s most advanced chips needed to power critical AI and defence products.
While Samsung is expanding its investment commitment in the US, it will also receive billions of dollars in subsidies from the US Chips Act. The Chips Act passed two years ago and earmarked A$80.63 billion in grants for projects supporting this industry.
Intel has already been granted A$12.93 billion under the Act last month for projects in Arizona, New Mexico, Oregon and Ohio. Intel’s total investment in the US over the next five years is projected to exceed A$152.13 billion. TSMC meanwhile is also building two chip-making factories in Arizona at an investment of around A$60.85 billion.
Samsung’s enhanced investment into its semiconductor business in Texas is expected to be formally made as soon as next week on April 15.
The timing is crucial. On Friday, Samsung Electronics posted a Q1 2024 preliminary operating profit of about A$7.4 billion. Not only did it beat analysts’ predictions of a profit of approximately A$6.41 billion for the quarter ending March 31, but it also marked its first quarterly profit after successive quarterly declines starting Q3 2022.
The sense of urgency in making the latest announcement takes on a new dimension when you consider that the American share of chip-making business decreased to about 12 per cent in 2020 from 37 per cent in 1990. That decline is looked upon as a national security liability as advanced chips are required across the board from consumer products to weapons and AI development.
