Samsung is reportedly considering investing $10 billion dollars in a new chip fabrication facility to be built in Texas. This would not be the first such plant to be built in the U.S. In fact, Samsung has already built a memory chip manufacturing factory in Texas, but it opened in 2011 and uses older technology. This new facility would aim for producing 3-nanometer process chips.
Samsung designs and manufactures a very diverse array of products, including electronics such as its well-known Galaxy S and Note series smartphones, smartwatches, tablets, and laptops. Its televisions are also very popular. Some may not realize, though, that Samsung also makes many of the components used in electronics, both for itself and other companies. It's is a leader in display technology, memory, storage chips, modems, batteries, and even mobile processors. Beyond electronics, Samsung makes a complete range of appliances, including refrigerators, washing machines and clothes dryers, microwave ovens and stoves, dishwashers, and vacuum cleaners. As one might expect, many of its appliances have advanced technology, like its refrigerator with a built-in tablet and internal cameras that can show what is on the inner shelves without the user having to open the door.
Mobile technology and computer components are Samsung’s primary business, though. Its mobile processors are among the best in the world, competing closely with Qualcomm in 2021 for the title of best Android system-on-a-chip (SoC). A new report from Bloomberg indicates some of that technological expertise may find a home in the U.S. Referencing unnamed sources that are familiar with the matter, the article claims that a $10 billion chip manufacturing plant is under discussion. The location is said to be Austin, Texas, the location of its existing factory, which can create chips using an 11-nanometer process. The current state-of-the-art is the 5-nanometer node and the potential new facility is expected to handle a 3-nanometer manufacturing process. The suggested date of construction is 2022 and operation may begin as early as 2023.
Why Samsung Might Build In The U.S.
There have been similar rumors that Taiwan Semiconductor Manufacturing Company (TSMC) may start the construction of a chip fabrication factory in Austin, Texas. Austin has a rapidly growing technology hub. In fact, it has been nicknamed by some as ‘Silicon Hills,’ a twist on the ‘Silicon Valley’ nickname of the San Francisco Bay Area. This makes it a convenient location to source materials and personnel. But why make chips in the U.S. when most mobile devices are assembled overseas? It may surprise some to hear that quite a bit of electronics manufacturing still happens in the U.S. Apple’s Mac Pro, many Hewlett Packard, Dell, and Lenovo computers, and quite a few internet servers are built in the U.S. Military contracts favor domestic production for extra security. Intel does most of its chip manufacturing in Oregon, but might be outsourcing in the future. So there are plenty of potential customers for such a facility.
There are good reasons for Samsung to build in the U.S., but placing its most advanced factory an ocean away from where most mobile manufacturing takes place may present a problem. Qualcomm, for example, would most likely prefer chips to be manufactured in East Asia, allowing quicker and easier logistics for mobile phone manufacturers that would be placing orders. Samsung’s own Exynos SoC is used in international versions of its Galaxy smartphones, presenting a logistics problem. Neither Samsung nor TSMC have committed to an advanced U.S.-based chip plant and the talk may have been based on pressures from the previous U.S. government’s administration. Whether Samsung will move forward with this plan or not is uncertain.
Source: Bloomberg