The Supply Chain Matters blog highlights a report indicating the presence of another potential U.S. semiconductor production facility.

This week Bloomberg reported that Samsung Electronics revealed additional details in a filing with the State of Texas regarding plans to construct a “cutting-edge” semiconductor facility within the United States. Bloomberg initially reported in January that Samsung had sights on investing in an advanced technology chip plant in the U.S. Now with details beginning to leak from filed proposals, more information is at-hand.

Semiconductor manufacturing

The South Korea based semiconductor producer reportedly plans to invest $17 billion in its termed Project Silicon Silver initiative with the potential for 1,800 jobs over ten years. Upwards of $5.1 billion would be directed at buildings and property improvements with a reported $9.9 billion invested in new process machinery and equipment.

The proposal submitted to Texas state authorities reportedly warns that this effort is “highly competitive” with a meaning that Samsung will also evaluate site alternatives relative to locations in Arizona, New York, as well as in South Korea. Samsung has had a 25-year presence in Texas, specifically Samsung Austin Semiconductor.

There remains growing speculation that increased trade and intellectual property tensions among the U.S. and China will lead to a de-coupling of advanced semiconductor supply networks.  Evidence of such geo-political tensions were supported with an announcement in May of 2020 from industry fab leader TSMC of an intention to invest in an estimated $12 billion “cutting edge” U.S. based chip fab facility in Arizona.   Now, with President Biden’s recently announced executive review of termed U.S. strategic supply chain needs, semiconductor companies know that an added U.S. presence could provide added monetary incentives, and both TSMC and Samsung, two the largest fab operators expect to be able to garner such incentives at both the federal, state and local levels.

A likely added consideration in the ability to lure such plant investments will be the added consideration for the reliability of the utilities and infrastructure of the likely locations. The recent severe weather that occurred across the state of Texas resulted in multiple day disruptions for electrical power across the state, including the Austin area. The disruption led to the temporary suspension of semiconductor production in the area and came amid the ongoing shortage of such components across automotive and other industries.

 

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