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| Samsung Electronics' chip plant in Austin, Texas / Courtesy of Samsung Electronics |
By Kim Bo-eun
Talks are still ongoing between Samsung Electronics and the government of Texas over a $17 billion (19 trillion won) investment to expand its semiconductor manufacturing plant in Austin, the company said Tuesday.
Company officials added that the tech giant was also having discussions with local governments over two possible sites in Arizona and one in New York.
Austin appears the most likely site for Samsung's additional facility in the U.S., given recent requests by the company to the local government for a tax break amounting to $800 million over a 20-year period. Samsung is pitching that the plant will create 1,800 jobs there.
The request was confirmed in documents Samsung submitted to the local authority. These said construction of the facility, adding 1 square kilometer to the existing site, would begin in the latter half of the year, with production beginning in 2023.
However, one of the Samsung officials said, "We are reviewing all sites with the same level of possibility. Texas is not the only candidate we are considering, given that infrastructure and other factors are also important."
Another noted: "We are still in talks with Texas to clear up hurdles in key issues, such as tax incentives and some administrative procedures."
Samsung already has a plant in Austin, manufacturing chips on 14 nanometer production lines, which has been operating for decades. This is its only chip producing base in the U.S., and Samsung makes contract-based semiconductors for clients such as Tesla, Qualcomm and Nvidia.
The move to expand production there comes as Samsung is seeking to increase its market share in contract-based (foundry) chip manufacturing.
Samsung is competing with the No. 1 foundry player TSMC which unveiled plans last year to build a $12 billion chip plant in Arizona this year. This is part of the Taiwanese chipmaker's plans to invest $36 billion to build six plants in the U.S.
The developments are taking place at a time the U.S. government is seeking to beef up local semiconductor production to compete with China. More than half of the world's semiconductor manufacturing capacity is based in Taiwan and China.
Meanwhile, production at Samsung's Austin plant remains halted since it was ordered to shut down Feb. 16 due to a power outage and water shortages resulting from a severe snow storm that hit the state of Texas. Power and water are back, but operations have yet to be resumed given the time it takes to bring production fully back on line.
There had been expectations that this could affect Samsung's decision in picking Austin as the site for its facilities, but it appears the possible tax benefit and the existing infrastructure are advantages the company cannot forgo.
The new plant is projected to produce advanced processors at the 3 nanometer level.
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