Samsung to Invest $40 Billion in Semiconductor R&D and Production Ecosystem in Texas

Samsung, the leading company in both memory chip and logic chip fields, has announced plans to invest over $40 billion in establishing a comprehensive semiconductor R&D and production ecosystem. In collaboration with the US government, Samsung will construct two world-leading logic chip factories, a research and development center, and an advanced packaging facility, while expanding its existing Austin wafer fab.

The expansion of the Austin facility will facilitate the production of fully depleted silicon-on-insulator (FD-SOI) process technology, which holds significant applications in aerospace and defense sectors. Samsung has also committed to working closely with the US Department of Defense.

The new facility will be situated in Tyler, Texas and will encompass an entire semiconductor R&D-production ecosystem. It will feature an advanced R&D plant dedicated to a more advanced generation than the current process node, as well as two wafer fabs focused on mass production of 4nm and 2nm process chips. Additionally, it will house an advanced packaging facility equipped with cutting-edge capabilities such as 3D packaging for high-bandwidth memory and 2.5D chip packaging, crucial for AI chips.

Apart from the agreed $6.4 billion in direct allocations, Samsung intends to seek investment tax credits from the US Treasury Department to cover 25% of compliance capital expenditures. This subsidy has resulted in Samsung increasing its investment in US semiconductor factories from $17 billion to nearly $45 billion, with one of the advanced logic chip factories set to commence production in 2026 and another, along with the advanced R&D factory, opening in 2027. Several suppliers have expressed their intention to relocate to the United States to collaborate with Samsung's semiconductor industry cluster.

US Commerce Secretary Raimondo highlighted the enormous scale of Samsung's advanced logic chip fabs, comparing them to 11 football fields, and emphasized the company's plan to construct two such facilities.

Samsung joins TSMC and Intel as the three major overseas advanced chip manufacturing giants that have received US chip subsidies. Despite receiving the lowest subsidy, Samsung boasts the highest investment ratio. TSMC secured $6.6 billion in subsidies and plans to invest $65 billion in establishing three chip factories in Phoenix, Arizona, while Intel received $8.5 billion and aims to invest over $100 billion in the US over the next five years.

Unlike TSMC and Intel, the US government did not mention preferential loan policies for Samsung in the announcement. However, Samsung possesses significant cash reserves, with approximately $50 billion in cash and realizable assets as of December.

Under the "The CHIPS and Science Act", factory construction subsidies amount to $39 billion, with the $21.5 billion received by these three companies constituting nearly 55% of the total. GlobalFoundries, the world's fourth-ranked wafer foundry, also received $1.5 billion in US factory construction subsidies in February. These subsidies primarily support the expansion of mature manufacturing processes. Microchip Technology and BAE Systems have also received similar payments.

President Biden, in a statement released by the White House, expressed that Samsung's investment agreement will bring advanced semiconductor manufacturing and research and development to Texas, generating at least 21,500 local jobs. The facilities will facilitate the production of some of the world's most powerful chips, critical for advanced technologies such as artificial intelligence.