Samsung is pushing back the production of advanced semiconductor chips at its new plant in Taylor, Texas. According to the Korean media, mass production at the factory will begin in 2025. The company originally planned to start churning out chips from this facility in the second half of 2024.
Samsung’s new chip plant in Texas may not be operational before 2025
In November 2021, Samsung announced a $17 billion investment to set up a new semiconductor factory in Taylor. It would be the company’s second chip plant in the US. The other factory is located in Austin, Texas, and has been operational since 1996. Industry insiders reported earlier this year that the new factory may end up costing Samsung $25 billion, over $8 billion more than the initial estimate.
Despite the added cost, the firm appeared on track to finish construction at the site by the end of 2023 and start operations next year. Unfortunately, the latest word is that the plan has been delayed. The new plant may not be operational until sometime in 2025, Bloomberg reports citing information from the Seoul Economic Daily. Samsung Foundry President Choi Siyoung reportedly broke the news at a recent industry event in San Francisco.
The Samsung executive didn’t share a precise timeline regarding the mass production plans at the new Texas chip plant. However, even if the production begins in early 2025, we are staring at a few months of delay. The cause of the delay is not known, though. There have been reports that the company is looking to construct a new building at the site to expand its production capacity amid an exponential rise in demand for AI chips.
TSMC has also postponed production at its new factory in Arizona
Samsung isn’t the only semiconductor foundry building a new factory in the US. Taiwanese firm TSMC, which holds a lion’s share in the global foundry market, is also constructing a chip plant in Phoenix, Arizona. It originally planned to start producing 4nm chips at the factory in 2024. However, the plan has been postponed until 2025. TSMC said this delay is due to a shortage of skilled workers with the necessary experience in installing semiconductor equipment.
These delays are a huge blow to US President Joe Biden’s plan to create a robust semiconductor supply chain in the country. The long-term plan is to establish self-sufficiency to avoid supply disruptions in the future. An unprecedented global chip shortage in 2021 cost American companies hundreds of billions in revenue. Biden wants the US tech industry to be prepared for such adversities in the years to come.
However, his government hasn’t quite delivered on promises of financial support to foreign companies expanding their chip production capacity in the US. Biden signed the Chips Act into law over a year ago, pledging an incentive of over $100 billion for participating companies. However, his government has reportedly only awarded a single grant so far—$35 million to British aerospace firm BAE Systems. Whether we see more activities after next year’s US presidential election, time will tell.
2023-12-27 15:05:18