Samsung Electronics announced April 15 that it would invest $40 billion in its semiconductor factory in Taylor, Texas, more than double its original plan of $17 billion. The US government has proposed a higher subsidy rate (16% or $6.4 billion) compared to Intel and TSMC, and the US Department of Defense recently signed up as a Samsung customer. Major players in the foundry industry such as Nvidia and Qualcomm were quick to mention a “Samsung partnership” and send welcome messages.
Despite the major party organized, the atmosphere at Samsung is not really festive. The foundry market is becoming increasingly competitive, with TSMC and Intel also building mega-fabs.
Samsung’s concerns are clearly reflected in the Taylor plant’s commissioning date. US Commerce Secretary Gina Raimondo said yesterday that “mass production of semiconductors is expected to begin at Taylor 1 starting in 2026”, more than a year later than initially planned.
Samsung Electronics has consistently stated since Taylor’s investment was officially announced in October 2021 that semiconductor production would begin in the second half of 2024. Although Choi Si-young, president of Samsung Electronics’ foundry business, has Samsung Electronics first mentioned “2025 production” at an event last December, saying that “the operation plan has not changed significantly.”
The official announcement of production in 2026 is considered by the industry to be “in line with recent measures taken by Samsung Electronics to adjust the pace of foundry investments.” Samsung Electronics also temporarily halted construction of the foundry line at its Pyeongtaek 4 factory in Korea.
Given the heightened competition in investments in advanced foundries, Samsung’s decision to adjust the operational schedule is considered a “rational decision.” TSMC plans to spend 100 trillion won to build three foundries in the United States and two in Japan. Intel plans to allocate a significant portion of its $100 billion investment to foundries. Analysts predict a strong possibility of “oversupply” within one to two years. An industry insider explained: “There is already an oversupply situation in existing foundry processes due to investments by Chinese companies. »
Some worry that the $40 billion investment is too big, as it is more than Samsung’s investment in semiconductor facilities last year of 48,372.3 billion won. The fact that an advanced 2-nanometer line is being installed in Taylor has sparked concerns in Korea that “Samsung Electronics is going all-in on the United States.”
However, the industry dismisses these concerns as unfounded. Samsung Electronics has no choice but to invest in semiconductors in the United States, as the US government pushes for investment and US customers like Nvidia welcome the establishment of a chain of national supply.
However, Samsung Electronics has not abandoned the principle of “keeping the most advanced lines in Korea”. It plans to invest about 300 trillion won in Factories 4-6 in Pyeongtaek and the National Semiconductor Industrial Complex in Yongin, Gyeonggi Province. This commitment is made in consideration of the need to secure excellent semiconductor talent and a robust ecosystem, which prevents Samsung from losing “home field advantage.” An industry insider said: “Just like TSMC, Samsung Electronics will keep its most advanced processes in the home country, and the government should provide appropriate incentives. »
The success of Samsung’s U.S. foundry business depends on securing large orders. The presence today of Jensen Huang, CEO of Nvidia, and Cristiano Amon, CEO of Qualcomm, at the investment commemoration ceremony at the Taylor construction site, emphasizing “partnership” and sending congratulatory messages, is a positive moment.
Nvidia and Qualcomm, while being customers of the Samsung foundry, entrust their most advanced chips to TSMC. This scene symbolizes that if Samsung improves its competitiveness, it can also make these companies its customers.
It has been confirmed that the US Department of Defense has also become a customer of the Samsung foundry. The US Department of Commerce said: “Samsung Electronics has decided to expand its existing factory in Austin and develop advanced technologies for key industries such as aerospace and defense in collaboration with the Department of Defense. »
