Samsung’s US$17 billion Texas chip plant to create 2,000 jobs as US looks to ease global chip shortage, counter China

Samsung Electronics Co outlined plans for a US$17 billion US semiconductor plant that will add more than 2,000 jobs, widen the South Korean giant’s foothold in Texas, and bolster its role as a vital supplier in the global manufacturing supply chain.

“Increasing domestic production of semiconductor chips is critical for our national and economic security,” US Commerce Secretary Gina Raimondo said in a statement Tuesday lauding the deal. White House officials also said they welcomed the investment, saying in a statement that it would help “protect our supply chains” and boost domestic manufacturing.

The project will create more than 2,000 jobs, Texas Governor Greg Abbott said at a press conference announcing the plans. Samsung also said that the plant would indirectly create thousands of additional jobs once it was operational. “The implications of this facility extend far beyond the boundaries of Texas,” Abbott said. “It’s going to impact the entire world.”

Korea’s largest company will build the facility in Taylor, Texas, about 30 miles from Austin, where Samsung has invested billions in a sprawling complex that already houses more than 3,000 employees and fabricates some of the country’s most sophisticated chips. Construction on the new plant is slated to start in the first half of 2022, and production will begin in the second half of 2024.

On Tuesday, Abbott touted Texas’s low taxes and talent pool as major draws for tech companies, and called Samsung’s decision to invest in the state “a testament to the economic environment that we have built”. Samsung could also receive US$3 billion in incentives from the US$52 billion bill known as the CHIPS Act if it passes, Texas Senator John Cornyn said Tuesday.

Samsung executive Kinam Kim said that the company’s decision to build in Texas was based on several factors including incentive programmes, local talent and “infrastructure readiness and stability”. Infrastructure is particularly important for chip operations, which need a stable supply of power. Earlier this year a cold snap in Texas forced Samsung and other companies to pause operations. But Abbott has sought to reassure businesses that power outages won’t happen again, and that the state is now producing more power than it was earlier this year.

Samsung joins Taiwan Semiconductor Manufacturing Co in making substantial investments in the US. The new facilities further the Biden administration’s goal of safeguarding the production of cutting-edge chips that are vital to defence as well as technologies like autonomous cars. It’s part of Washington’s broader effort to counter China’s rising economic power, as well as lure home some of the advanced manufacturing that in past decades has gravitated toward Asia.