December 26, 2023 – Samsung Electronics Delays Start of Production at Texas Semiconductor Plant
According to a report from Businesskorea, Samsung Electronics has postponed the start of production at its new semiconductor factory in Taylor, Texas, USA, to 2025, delaying the original target of commencing production next year. The delay is speculated to be related to issues involving government subsidies and various permitting complexities, with the uncertainty of economic recovery also seemingly impacting Samsung Electronics’ investment decisions in the region.
Siyoung Choi, Head of Samsung Electronics’ foundry business, announced during the 2023 International Electronic Devices Conference that the production timeline for the new factory in Taylor, Texas, has been pushed from 2024 to 2025, with the first wafers expected to roll out in the latter half of the following year. This marks a significant shift from the initial plan announced during the 2021 investment announcement, which aimed for production to begin in the latter half of 2024.
Industry insiders now anticipate that the Taylor plant will undertake small-scale equipment installations next year instead of full-scale operations. Samsung plans to install a production line capable of producing 5,000 12-inch wafers (5K) per month after the first half of next year. This production line, in comparison to the recently built large 4-nanometer line at Samsung’s P3 facility in Pyeongtaek, South Korea, is relatively smaller, with P3’s capacity standing at 28,000 wafers per month.
Over the past two years, Samsung Electronics has invested $17 billion in this Texas-based factory, which is currently under construction. The factory spans a kilometer in length, with its initial production line set to manufacture 4-nanometer semiconductors.
Several factors contributed to the change in the Taylor plant’s production schedule. One key factor is the delay in government subsidies from the U.S. government. The U.S. government had pledged a total of $52.7 billion in subsidies to companies building semiconductor factories locally under the Chip Act. However, recent reports suggested that the Biden administration may provide Intel with advance subsidies of up to $4 billion, raising concerns about the allocation and prioritization of subsidies, possibly favoring domestic companies over Samsung Electronics.
Samsung Electronics’ U.S. subsidiary has also sensed this atmosphere and organized events in the U.S. urging policymakers to expedite the subsidy process. They emphasized that “over the past 30 years, Samsung has invested a total of $47 billion in semiconductors. Our decision to invest in the semiconductor sector was made based on trust in the U.S. Congress and government before the Chip Act was passed,” and urged timely subsidy disbursement. Furthermore, the U.S. government’s construction permitting process is speculated to be another factor contributing to the delay.
Market uncertainty is another concern for Samsung. While the industry predicted a recovery from the severe semiconductor demand slump that began in the latter half of the previous year, some speculate that further decisions may be delayed based on market conditions.