Samsung considers $10 billion US-based chip manufacturing plant

The Texas chip manufacturing plant would produce 3-nanometer processors

Reports indicate that Samsung’s semiconductor manufacturing arm is considering an approximately $10 billion investment in a fab in Texas that would produce chips on a 3-nanometer (3nm) process.

This wouldn’t be the company’s first Texas plant. Samsung already has a semiconductor factory in Austin where it recently worked with AT&T to develop a number of initial use-case experiments for industrial 5G in the areas of robotics, industrial IoT and mixed reality applications.

The pair claim the venue, announced in 2018, is the first “manufacturing focused 5G innovation zone” in America. The Samsung semiconductor fab collects data from thousands of machines, noted AT&T.

The latest news, however, is most likely motivated by Samsung’s desire to more easily reach U.S. customers as the company continues to compete with Taiwanese chip making giant TSMC, who has also revealed plans to establish a U.S.-based plant in Arizona for $12 billion. TSMC’s plant will make 5-nanometer transistor chips, with production expected to begin in 2024. 

Further, there is an ongoing chip shortage occurring around the world that is of particular consequence to the auto industry. Taiwan’s Economics Ministry announced that TSMC will begin to prioritize production of auto chips if it is able to further increase capacity to help address the global semiconductor shortages that have forced automakers to halt production at manufacturing facilities.

Samsung, presumably to keep up with TSMC, needs more chip-producing capacity, which is where the new Texas plant will come in.

Currently, TSMC is the top chip pick for giants like Apple and Advanced Micro Devices, but Samsung hopes that by investing $116 billion into its goal to mass produce 3nm chipsets by 2022, it can finally become the chipmaker of choice for more companies. This is particularly prudent considering the growing trend of companies like Microsoft and Amazon of deciding their own chips that are then outsourced to chip manufacturers.

Additionally, trade tensions continue to fester between the U.S. and China, indicating that it might prove advantageous for Samsung to have a strong foothold in the U.S., particularly as the U.S. is eyes substantial funding to grow at-home chip manufacturing.

According to Bloomberg, plant construction could begin this year if it begins at all, and operations could kick off as soon as 2023.

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