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Samsung to invest $44 billion in the Texas chip plant - WSJ

Published 04/05/2024, 06:04 AM
Updated 04/05/2024, 06:06 AM
© Reuters.  Samsung to invest $44 billion in the Texas chip plant - WSJ
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Samsung Electronics (SSNLF (OTC:SSNLF)) is set to more than double its semiconductor investment in Texas to around $44 billion, the Wall Street Journal reported on Friday.

The focus of Samsung's additional investment is Taylor, Texas, where the company is establishing a second semiconductor hub, complementing its existing operations in the area. This expansion will include a new chip manufacturing facility and a site dedicated to advanced packaging and research and development (R&D).

According to the report, the cost of the second chip factory in Taylor is estimated to exceed $20 billion, with the R&D activities expected to be housed within these two plants. However, the investment details could vary based on market conditions.

The construction of the advanced packaging plant, crucial for producing high-end AI chips like those by Nvidia, is projected to cost about $4 billion, per WSJ’s sources.

Samsung, alongside Intel (NASDAQ:INTC) and Taiwan Semiconductor Manufacturing (TSM), is among the few companies capable of manufacturing advanced logic semiconductors essential for AI and national defense.

These chipmakers play a central role in the Biden administration's goal to bolster the U.S.'s semiconductor manufacturing capacity and counteract China's technological advancements.

To support its expansion in Texas, Samsung is reportedly set to receive significant subsidies from the U.S. Chips Act. While negotiations with the Commerce Department are still underway, the South Korean electronic devices giant is expected to secure one of the largest subsidies awarded to any single company under this initiative.

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