Samsung Unveils $191B Semiconductor Fab Expansion in Texas

As Congress gets ready to approve $52B to subsidize expanded US semiconductor manufacturing and research, Samsung has unveiled plans to build 11 new chip fabs in Texas, a potential investment of $191B. 

The South Korea-based electronics conglomerate, the world leader in semiconductor manufacturing, announced it is planning to add two chip fabs to its semiconductor complex in Austin and nine more chip plants to its complex in Taylor, TX, where Samsung currently is preparing to build an advanced semiconductor facility for $17B.

In a Chapter 313 application to the state of Texas—the first step in a long-term planning process that would result in the state issuing tax breaks for the projects—Samsung said the first of the 11 new plants would be operational by 2034.

However, the South Korean conglomerate emphasized that the public filing does not commit Samsung to build the new chip fabs, and the company reserves the right to change its plans.

The unveiling of Samsung’s plans for a mammoth expansion of its US semiconductor manufacturing footprint no doubt was timed to give a big push to a bill coming to final vote in Congress this week that would provide $52B in federal subsidies for chip manufacturing and research along with billions more in funding for new tech initiatives.

A global shortage of semiconductors—most of which are made in Asia—exacerbated by supply-chain disruptions during the pandemic nearly shut down automotive manufacturing last year as OEMs ran out of chips.

The bill that is moving through Congress this week originated last year as the United States Innovation and Competition Act, which proposed a huge infusion of federal tech spending to boost US competitiveness with China.

In addition to $52B in funding for semiconductor manufacturing and research, the bill will provide $100B in funding for the National Science Foundation and regional tech start-ups.

The US Senate is expected this week to take a final vote on the bill, a top priority of the Biden Administration, moving it to the House, where it is expected to pass before the Congress goes into recess for the rest of the summer.

The National Science Foundation will use the new funding to create a new technology directorate that will seek to turn research breakthroughs in artificial intelligence and quantum computing into real-world applications.

The leading semiconductor manufacturers already are jockeying for position in anticipation of generous federal subsidies.

Intel, which has announced semiconductor fab projects in Ohio and Arizona, and GlobalFoundries, which has a semiconductor complex it is planning to expand near Albany, NY, have both indicated they’re counting on government subsidies to help finance these expansions.