Samsung chooses Texas to build chip plant

Samsung Electronics Co. decided to build an advanced chip plant in Texas, a victory for President Biden’s administration by prioritizing supply chain security and increased semiconductor capacity on US soil.

South Korea’s largest company settled on the city of Taylor, about 30 miles from its giant manufacturing facility in Austin, said a person familiar with the matter.

Samsung and Texas authorities announced the decision Tuesday night. Samsung hopes to win more American customers and narrow the gap with Taiwan Semiconductor Manufacturing Co. His decision, which came months after its de facto leader, Jay Y. Lee, got out of jail on parole, follows the plans of TSMC and Intel Corp. to spend billions on state-of-the-art facilities around the world.

The industry triumvirate is scrambling to meet increased demand in the aftermath of the pandemic, which has pushed global capacity to full capacity, while anticipating that more and more connected devices, from cars to homes, will need chips in the future.

The new plant will increase the already considerable presence of Samsung in Austin, where to date it has invested about $ 17 billion in a sprawling complex that houses more than 3,000 employees and makes some of the most sophisticated chips in the country.

Samsung it plans to invest another $ 17 billion and create about 1,800 jobs in the first 10 years, according to documents filed with Taylor authorities.

The Korean agency Yonhap and the Wall Street Journal had previously reported on the selection of Taylor’s city.

The Asian giant is taking advantage of the efforts of the US government to counteract China’s growing economic power and attract to its country part of the advanced manufacturing that in past decades gravitated towards Asia.

This ambition came to fruition after a global chip shortage hit the tech and auto sectors, cost companies billions in lost revenue, and forced factories to lay off workers, exposing America’s vulnerability to supply chains. diversified supply.

In June, President Joe Biden launched a broad effort to secure critical supply chains, including a $ 52 billion proposal to bolster domestic chip production.

The government has repeatedly expressed the need to increase chip production in the United States, stating that it is the best way to compete with China and to mitigate supply chain disruptions such as COVID-19. Last month, the United States created a “early warning system”To detect COVID-related disorders.

In addition, he asked semiconductor producers and consumers to complete a survey on inventories, demand and delivery systems, to identify potential problems.

Recently, Intel’s problems to increase its technology and its possible dependence in the future on TSMC and Samsung for at least part of their chipmaking they have revealed just how far the Asian giants have taken the lead in recent years. The administration dissuaded Intel from going ahead with its plans to set up a factory in Chengdu, China, to make silicon wafers.