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Wednesday, November 24, 2021

Samsung to Start Advanced Chip Plant in Texas

Bidens Government supply chain policy scores as Samsung electronics decides to build an advanced chip plant in Texas. This move will reinforce the Bidens administration’s prioritized expanding semiconductor capacity and supply chain security on American soil.

As per Bloomberg News, the South Korean electronics giant has chosen Taylor city, which is nearby to its existing manufacturing complex in Austin, according to informed sources in this matter.

The Texas officials and Samsung will make the announcement on the decision on Tuesday afternoon, according to t people who did not wish to be identified as the matter is still not made public as yet. Samsung official declined to comment further after saying it has not made a final decision yet.

Samsung plans to narrow the gap with Taiwan Semiconductor Manufacturing Co. and get more American clients. This decision came months after Jay Y. Lee, the de facto leader, was released on parole from prison. Intel Corp. and TSMC are planning to spend billions to manufacture cutting-edge facilities across the globe. The industry trio is racing to meet post-pandemic demands, which has stretched global capacities to the limit, and new demands for the car to home connectivity that will require more chips in the future.

Samsung’s new plant will augment its already strong presence in Austin, where it has invested $17 billion on the sprawling complex that employs 3000+ employees and manufactures U.S. mist sophisticated chips. It plans to invest further $17 billion and create additional 1800 jobs in the next ten years as per documents submitted by the company officials in Taylor. Taylors site selection was earlier reported in the Wall Street Journal and Korea’s Yonhap.

The largest Korean company is taking advantage of a concerted move by the U.S. government to counter China’s rising economic power. This move lures back the advantage of its advanced manufacturing that had gravitated towards Asia in the last decade.

The new ambition was fuelled by the global shortage of chips supply that made the auto and tech companies go limp and cost millions of dollars of revenue loss to companies who had to lay off workers, even as it exposed U.D.S. vulnerability to diversify the supply chains. In June this year, President Biden had made sweeping changes to secure the U.S. supply chain that included strengthening the domestic chip production.

The Biden administration repeatedly said that the chips supply products in the U.S. must increase to avoid the bottlenecks and disruptions that happened during the pandemic from repeating. Last month, it created an alert system to detect any Covid related shocks to the chip supply. It also asked consumers and manufacturers to complete a survey that asked about inventories, demands, and delivery systems to help the administration identify potential problems in advance.

Recently the government discouraged Intel Corp. to go ahead with its plan to start operating silicon wafers manufacturing facility in Chengdu, China.

The government called the Democrats in the House of Representatives to pass a $52 billion CHIPS Act. This budget would help domestic semiconductors manufacturing and research. The legislation was aimed to counter China and prevent a long-term chips supply crunch. 

The bill also took note of the security concerns in Taiwan as Commerce Secretary Gina Raimondo said that the congress should pass the legislation quickly when asked about U.S. defense strategy related to Taiwan. 

Raimondo told reporters,” The lack of domestic production in America is just not an economic threat but also threatens its national security.

Intel recently faced trouble in ramping up its technology and chances of dependency on TSMC and Samsung in the future for its chips production, which underscored the fact that Asian companies have pulled ahead in recent years. The U.S.’s Commerce department has asked manufacturers to prove details of their semiconductor supply chain, citing the current status on-chip shortage apart from waring that they will take action if there was no response from the companies.   

Samsung has accelerated its investment activities since its leader Lee was released from jail, imprisoned on corruption charges. It has committed to strengthening its economy by pumping in $205 billion (240 trillion won) and hiring an additional 40,000 people over the next three years. Samsung, the world’s largest smartphone and display maker, is planning acquisitions ranging from automotive to A.I.

Samsung is going head-to-head in Intel’s backyard and is on track to start its $12 billion chip manufacturing plant by 2024 in Arizona. It is trying to catch up with TSMC in the so-called foundry business of chipmaking for global corporations – a key manufacturing area after the recent semiconductor shortage.

Samsung plans for a U.S. foundry will mean acquiring ASML Holding NV’s extreme ultraviolet lithography equipment business. ASML has struggled with its advanced chips processes poor yields for years and is accelerating and improving its capacity expansion. It aims to produce chips of 30 nanometres around 2022 with a new gate-all-around technology that promises lower power consumption and shrinks the chip sizes. Competitor Intel has vowed to retake the lead in the industry by 2025.

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Josie Patra
Josie Patra is a veteran writer with 21 years of experience. She comes with multiple degrees in literature, computer applications, multimedia design, and management. She delves into a plethora of niches and offers expert guidance on finances, stock market, budgeting, marketing strategies, and such other domains. Josie has also authored books on management, productivity, and digital marketing strategies.

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