Samsung considering investing billions in US chip plant

Samsung Electronics Co. is deliberating an investment into a chip-making factory that could cost up to $13 billion. 

The South Korean company is looking at two locations around Austin, Texas, two locations around Phoenix and a location in Genesee County in New York, sources told The Wall Street Journal. 

Samsung wants to take the opportunity to negotiate with the federal government as the U.S. works to rely less on Taiwan, China and South Korea, the sources said. Samsung will be negotiating with the government for tax incentives and other incentives because it would be cheaper to develop its product in other parts of the world. 

Incentives for chip-making were passed in January with the National Defense Authorization Act, but it has not received the promised funding yet. 

Samsung is trying to compete with Taiwan Semiconductor Manufacturing Co. (TSMC), which is also based in the U.S. and is the leader in the chip-making industry here. TSMC is looking to have a $12 billion plant up and running in Arizona by 2024, Bloomberg reported. 

“If Samsung really wants to realize its goal to become the top chipmaker by 2030, it needs massive investment in the U.S. to catch up with TSMC,” said Greg Roh, senior vice president at HMC Securities. “TSMC is likely to keep making progress in process nodes to 3nm at its Arizona plant and Samsung may do the same. One challenging task is to secure EUV equipment now, when Hynix and Micron are also seeking to purchase the machines.”

Samsung’s goal is to have a chip-making plant operational by October 2022 and to employ 1,900 people at that plant. There is consideration to invest $10 billion into a plant near Austin, sources told Bloomberg. 

The Austin City Council had a meeting in December after Samsung requested to rezone part of its land for industrial development. A brokerage report found that Intel will most likely give more orders to Samsung so it isn’t relying on TSMC as much.

Samsung wants to be the biggest company in a $400 billion industry and plans to invest $116 billion over the next decade to make that happen.