After a year of searching for the right place of its new U.S. fab, Samsung this week announced that it would build a fab near Taylor, Texas. The company will invest $17 billion in the new semiconductor fabrication plant and will receive hundreds of millions of dollars in incentives from local and state authorities. Separately, Texas authorities have announced that Texas Instruments intend to spend $30 billion on new fabs in the state, as well.

Samsung to Spend $17 Billion on New Texas Fab

Samsung yet has to disclose all the details about its fab near Taylor, Texas, but for now the company says that the new fab site will occupy an area of over 5 million square meters and will employ 2,000 workers directly and another 7,000 indirectly. To put the number into context, Samsung's fab near Austin, Texas currently employs about 10,000 of workers. 

Samsung will start construction of the new fab in the first half of 2022 and expects it to be operational in the second half of 2024. It usually takes about a year to construct a building for a semiconductor manufacturing facility and then about a year to install and set up all the necessary equipment.

Samsung has not announced which process technologies will be used at its fab near Taylor, Texas, but says it will produce chips for 5G, artificial intelligence (AI), high-performance computing (HPC), and mobile applications, which implies that the fab will gain fairly advanced technologies. In fact, keeping in mind that all of Samsung's nodes thinner than 7 nm rely on extreme ultraviolet (EUV) lithography, it is reasonable to expect the new fab to be EUV capable. As a result, Samsung's customers from the U.S. (such as IBM, Nvidia, and Qualcomm) will be able to produce their chips in the U.S. rather than in South Korea, which might allow their developers to address systems used by the U.S. government. 

"With greater manufacturing capacity, we will be able to better serve the needs of our customers and contribute to the stability of the global semiconductor supply chain," said Kinam Kim, Vice Chairman and CEO, Samsung Electronics Device Solutions Division. "In addition to our partners in Texas, we are grateful to the Biden Administration for creating an environment that supports companies like Samsung as we work to expand leading-edge semiconductor manufacturing in the U.S. We also thank the administration and Congress for their bipartisan support to swiftly enact federal incentives for domestic chip production and innovation."

Samsung's new semiconductor production plant will be located 25 kilometers away from the company's fab near Austin, Texas, so the facilities will be able to share infrastructure and resources (such as materials and supplies).

Samsung says that it will spend about $6 billion on construction on the building as well as improvements of the local infrastructure. Tools that will be used by the fab will cost another $11 billion. Meanwhile, to build the new plant Samsung will receive hundreds of millions in incentives from the state, the county, and the city, according to media reports. Some of the packages have not been approved yet. 

Texas Instruments to Invest $30 Billion on New U.S. Fabs

Samsung is not the only company to build new fabs in Texas. The Governor of Texas recently announced the Texas Instruments was planning to build several new 300-mm fabs near Sherman. In total, TI intends to build as many as four wafer fabrication facilities in the region over coming decades and the cumulative investments are expected to total $30 billion as fabs will be eventually upgraded.

Texas Instruments itself yet have to formally announce its investments plans, but the announcement by the governor Greg Abbot indicates that the principal decisions have been made and now TI needs to finalize the details. 

Sources: SamsungAustin American-StatesmanTexas.gov

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  • mode_13h - Friday, November 26, 2021 - link

    People have already pointed out that it's a big state and rainfall levels vary quite a bit. If you'd just clicked the Texas link, you could've seen that Austin gets a little more rainfall than 31-ranked Iowa.

    https://www.currentresults.com/Weather/Texas/avera...
    Reply
  • 3dgaming - Friday, November 26, 2021 - link

    Many reasons - number one is the expense of doing business in California. I am not a Cali basher - it just is more desirable and more expensive... Power, and of course I am sure they are getting MANY incentives from taxes, land etc... It's a good fit, of course they need to make sure their power works consistently - curious what agreements they have made for power. It is a scary thing for politics though as Texas is pretty even politically, and more educated workers are going to lean left.... Reply
  • mode_13h - Saturday, November 27, 2021 - link

    > It is a scary thing for politics though as Texas is pretty even politically,
    > and more educated workers are going to lean left....

    That could actually be the appealing part, from the state's perspective. It's a capital-intensive project that only involves 2000 workers. It's going to be a bonanza for local construction firms, and only some of those workers will come from more liberal states.
    Reply
  • FunBunny2 - Saturday, November 27, 2021 - link

    " It's going to be a bonanza for local construction firms"

    doesn't work that way. Big Bidnezz, like Samsung, have 'partnerships' with construction management firms and contractors for all trades. they may hire a few locals for low-skill trades, but the bulk will be travellers for those 'partners'.
    https://www.samsungengineering.com/

    guess I was right.
    Reply
  • mode_13h - Sunday, November 28, 2021 - link

    > Big Bidnezz, like Samsung, have 'partnerships' with construction management firms
    > and contractors for all trades.

    There's absolutely no way they're going to bring in all the equipment and materials from like South Korea or whatever. The majority of the construction equipment, material, and labor is going to come from within and around TX. Plus, the land owners where the fabs are being built will get a big pay day.
    Reply
  • JCB994 - Saturday, November 27, 2021 - link

    Samsung has two fabs in Austin...the first started up in 1997 and is 8". The second started about 10 years later is 12". Reply
  • BonglerMongler - Wednesday, December 1, 2021 - link

    Eh.... A lot of the time, people get politically/ideologically invested in these types of things, like they are worried about their own region's impact in what everyone understands is the most important economy of our time.

    The simple fact is that high-volume production fabs don't meaningfully impact the educational or economic levels of the local or regional electorate in the ways that people might assume.

    You don't need a PhD and Post Doc from a top 10 global Solid state/Materials program to work at a commercial high volume fab.

    You barely need a STEM bachelors to work in one of these facilities.

    If you did, then the economic trend of offshoring fabs to places like Costa Rica, Mexico, China, or even leaving them in places like Idaho (face it, the assessment is completely honest and accurate) would never have been practical in the first place.

    The overwhelming majority of bunny suit wearing workers are mid-to-low skill workers making modest salaries for the manufacturing sector, but not "white collar" money.

    THIS is why they build in WI, AZ, and TX. You can pay people less money.

    the tiny handful of people who need to possess verifiable or provably higher skill or expertise can be paid a little extra to live where they don't want to live in order to have 99% of the workforce paid as much as 25% lower than elsewhere.

    there is a 2nd side to this that goes completely ignored: Texas has one of the largest expat communities of Indians in the US, plenty of whom are "permanent" H1-B visa holders waiting 20 years for their slot in line to get a green card. or, you know, their native born citizen children.... a demographic that grows exponentially year after year.

    The point I am making here is that the economic and "marketing" argument for political partisans falls flat

    relatively few people will move to TX. UTA's solid state/Materials/ECE departments will see relatively little overall increases to their facilities, instrumentation, or faculty numbers ("relatively little" compared to overall increases at competing institutes in other states, following the same trends occurrent throughout the US)

    The jobs that are created will look and pay like comparable jobs by nearby employers in manufacturing or resource extraction. They will demand similar educational levels and attract a similar workforce.

    However, the largest existing workforce that can be hired immediately with minimal training will consist of a large if not outright majority of people who DO NOT LOOK LIKE the traditional conservative voting base of the state or the US as a whole.
    Reply
  • mode_13h - Wednesday, December 1, 2021 - link

    > the workforce paid as much as 25% lower than elsewhere.

    As FunBunny2 pointed out, the cost of labor is relatively small relative to the capital expenditures involved. That has me thinking the lower labor costs aren't their primary motivation for locating in Texas.

    > The overwhelming majority of bunny suit wearing workers are mid-to-low skill
    > workers making modest salaries for the manufacturing sector,

    Given the high cost of failure, I think they'll probably opt to pay more for a bit higher-quality employees.

    Since they already have fabs in the area, I'm sure that's a known quantity and they probably have a good idea of what sorts of employees they want, for which jobs, and how much they'll probably cost.
    Reply
  • Oxford Guy - Thursday, December 2, 2021 - link

    The irony of a situation in which a state that ranked 50th in high school graduation being deemed the most suitable for a foreign high-tech firm to use — with tax handouts (and likely lax environmental policy) — is not the only point.

    Hooray for your cheap labor and lax environmental policy. What are the bigger-picture implications? Should high school no longer be mandatory, for instance? If success means a population that elects people eager to subsidize corporations while claiming they oppose government subsidies — is the recipe for this success even less education? Should generalized K-12 be replaced with the corporate apprenticeship system as some would have it?

    Is that a race to the bottom? Is it an unavoidable cost of ‘doing business’ due to globalization? I remember the big sales pitch used to be that Americans would become more educated, not less — in order to be more competitive — especially in tech. What is going to maintain the ‘first-world’ standard of living for not just Texans but US citizens in general?
    Reply
  • FunBunny2 - Thursday, December 2, 2021 - link

    "Hooray for your cheap labor and lax environmental policy. "

    this is the slave-wage Capitalist's Dilemma. you're only hope of making money is to Export to some areas/states/countries/regions with high wages. your workers, and their neighbors can't afford your widgets. the Red states did this first, then Mexico, then Central America, then Asia in its various parts. the only winners are the dictators of the Export states and the high wage consumers in the Importing regions.
    Reply

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