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Samsung Electronics will produce the latest generation of semiconductors in the United States two years ahead of rival Taiwan Semiconductor Manufacturing Company, further boosting President Joe Biden’s efforts to bring advanced chip production domestically.
U.S. Commerce Secretary Gina Raimondo announced Monday that the South Korean chipmaker is close to producing chips at the 2-nanometer miniaturization level in a new manufacturing plant, or fab, that it is in building in the town of Taylor, Texas. It will be part of a $40 billion investment in capabilities ranging from microprocessor manufacturing to advanced chip packaging and research and development work.
Samsung will receive up to $6.4 billion in direct funding under the US Chip and Science Act, a week after the US government announced TSMC would receive up to $6.6 billion from the program flagship grants to support its chip expansion plans in Arizona.
The first of Samsung’s new Taylor factories will begin making 2nm chips in 2026, according to a senior US official. TSMC is expected to produce 2nm chips at a factory in Arizona starting in 2028.
The Biden administration aims to increase domestic production of advanced chips from zero to 20% of global supply by the end of the decade, amid fears it could be disrupted by a natural disaster or possible future conflict in East Asia.
“A large part of the semiconductor supply chain. . . is concentrated in a few Asian locations, making the U.S. supply chain incredibly vulnerable to disruption,” Raimondo said, adding that Samsung’s new investment “puts us on track to achieve our goals.” [20 per cent] aim”.
“We are currently making these investments that will allow the United States to once again become a world leader, and not just in semiconductor design. . . but also in manufacturing, advanced packaging and research and development.
An initial investment of $17 billion, out of a planned total of $40 billion, was announced by Samsung in 2021 to build its first factory in Taylor, which will now manufacture 2nm and 4nm chips.
The new capital spending adds a second factory that will also manufacture 2nm and 4nm chips, as well as building an advanced chip packaging facility for “2.5D packaging” of processors and memory chips.
Advanced packaging is a crucial step in the production of artificial intelligence chips like Nvidia’s H100, which is used to train generative AI systems such as OpenAI’s ChatGPT.
TSMC, the world’s largest contract chipmaker, is doing 2.5D packaging for Nvidia’s most powerful chips. But there are currently no plans to locate such an advanced packaging plant in the United States.
“Right now, even chips made in the United States are still often shipped to Taiwan for packaging, including chips used in defense systems,” Raimondo said.
With its new plans for Taylor, Samsung will be able to combine the latest graphics processing units and its own high-bandwidth memory chips into advanced AI products packaged at its U.S. facilities.
Last month, Nvidia CEO Jensen Huang wrote “JENSEN APPROVED” on a Samsung HBM3E chip on display at a developers conference in California, sparking speculation that Samsung was on track to get the leading AI chip supplier as a customer.
“To meet the expected increase in demand from US customers for future products such as AI chips, our [Taylor] the factories will be equipped for cutting-edge process technologies and help strengthen the security of the U.S. semiconductor supply chain,” Kye Hyun Kyung, president and CEO of Samsung’s chip division, said Monday.
Lael Brainard, a White House economic adviser, said Samsung had also made a “series of commitments to enable it to manufacture chips directly for the Department of Defense.”
The senior U.S. official also noted that Samsung’s R&D plant for developing future generations of chips would be only the fourth such facility in the world and the first built in the United States by a non-U.S. company.
Monday’s announcement was the sixth and final disbursement of the first round of Chips Act grants. US chipmaker Intel received the largest sum, up to $8.5 billion, while GlobalFoundries, Microchip Technology and BAE Systems also received funding.
Additional reporting by Lauren Fedor in Washington and Michael Acton in San Francisco
