The Group’s largest single US investment comes amid a global semiconductor scarcity and attendant national security threats. Samsung has announced plans to establish a USD 17 billion semiconductor facility in Texas, despite a global scarcity of chips used in automobiles, phones, and other electronic gadgets. The factory, located miles outside Austin, would be the South Korean company’s largest investment in the United States, and it is slated to be completed in the second half of 2024. Samsung has also investigated Arizona and New York as potential locations for manufacturing, which will be significantly larger than its other sole US chip unit, also located in Austin.
The new plant, according to Samsung, would increase the manufacturing of high-tech semiconductors used in 5G mobile connectivity, sophisticated computing, and artificial intelligence, as well as improve supply-chain resiliency. Chip shortage has become a big corporate impediment as well as a critical national security risk in the United States. Shutdowns caused by the COVID-19 outbreak hampered the manufacture of new automobiles and technological goods for more than a year. National security has also become a concern since many US corporations rely on semiconductors manufactured in other countries, notably Taiwan, which China has long claimed as its own.
According to Nina Turner, an analyst at the research firm IDC, being so dependent on Taiwan for most of the planet’s semiconductor manufacturing is a concentration concern, a geopolitical vulnerability. She went on to say that while the shortages were expected to alleviate, there would be a long-term need for semiconductors as more and more common goods relied on them. The Governor of Texas, Greg Abbott, remarked of Samsung’s new facility, “This is the greatest international direct investment in the state of Texas, ever.” Samsung is one of the world’s top chipmakers, employing over 20,000 people in the United States. It stated that the new announcement brought its overall investment in the nation to USD 47 billion.
Kinam Kim, the company’s vice-chair, stated that the location was chosen based on several criteria, including state subsidies and the “preparedness and reliability” of regional infrastructures. Numerous chipmakers are moving out of their production facilities in response to the shortage, which has impacted industries ranging from automobiles to video games. Another factor, according to Angelo Zino, an analyst at CFRA, was the assumption that Congress would authorize government grants for the semiconductor sector to construct production plants in the US, in the hope of bringing jobs, alleviating future supply worries, and giving the US more power and influence over economic adversaries such as China.
The Biden government has lobbied Congress to adopt the USD 52 billion Chips Act, which will enhance computer chip manufacture and research. Separate legislation is also being considered, which would establish a tax incentive for investments in chip manufacturing plants. Other nations have achieved similar endeavors to bring chip manufacturing closer to where the semiconductors are being utilized. Earlier in November, the European Commission stated that it might authorize funding to finance semiconductor manufacture in the EU’s 27-nation bloc.
