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Samsung Could Construct Its New $17 Billion Chip Factory In Austin

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After months of pondering and negotiations, Samsung may have finally decided on where to construct its new $17 billion chip factory in the US. According to a Reuters report, the company will set up the factory in Williamson County, Texas. The Korean firm is “close” to finalizing the deal, the publication cites multiple sources familiar with the matter.

Williamson County has been the frontrunner in this race. Officials from the county have offered an extensive incentives package to Samsung, including a rebate of up to 90 percent of property taxes. It appears the company couldn’t turn down this offer.

One of the sources told Reuters that Samsung could select a site in the Austin suburb of Williamson County. The company already has a chip plant in Austin. So this could have influenced its decision, though the report suggests it’s the subsidies on offer. The area also has other benefits including stable sources of electricity and water.

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That said, a statewide power outage in Texas earlier this year forced Samsung to temporarily shut down its chip plant in Austin. This sudden closure caused the company a loss of over $270 million.

Samsung may soon announce the location of its $17 billion chip factory

The ongoing global semiconductor chip shortage has hit the tech industry hard. US President Joe Biden earlier this year met with the industry’s biggest stakeholders to discuss the matter. He urged all major chipmakers to expand their production stateside. The American government is offering incentives including tax benefits to the companies to try and woo them to build more semiconductor factories in the country.

Chip giants like Intel and TSMC have already announced their respective multi-billion investments to construct new chip factories in the US. Samsung has also been exploring multiple sites for the past several months. However, it has taken forever to zero in on a location. Perhaps the delay is because of the absence of Lee Jae-yong, the de-facto leader of the company. He has been in jail since January this year but got out on parole last month. So he may have now facilitated the decision and we could have an announcement soon.

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“With the United States turning semiconductors into a strategic material, it is becoming a risk to be concentrated only in Asia,” said analyst Park Sung-soon. “Samsung wants to be on the ground in the US.”

Samsung plans to begin construction of the new 6-million-square-foot (557,418-sq-meter) factory in January next year. It expects the factory to be operational by the end of 2024. The company will manufacture advanced logic semiconductor chips at the factory.