Samsung is considering spending over $10 billion to build an advanced new logic chipmaking plant in Austin, Texas, Bloomberg is reporting. The plant may be capable of making processors as advanced as 3nm, and would be Samsung’s third worldwide to use extreme ultraviolet lithography technology in its chip production. If the plans go ahead, construction at the plant could begin this year, with operations commencing as soon as 2023.
An advanced US-based Samsung fabrication plant could provide Samsung a foothold in getting new contracts from US customers amidst ongoing trade tensions between the US and China. The move would also bring Samsung into closer competition with TSMC, which manufactures chips for Apple, among others, including the 5nm processors found inside Apple’s latest iPhones and Macs. TSMC is also investing in a US-based plant, with a $12 billion location in Arizona that’s expected to start making chips by 2024. In a statement given to Bloomberg, Samsung said it had yet to make a decision about its plans for a new US facility
AS PART OF AN ATTEMPT TO PUSH MORE INTO THE PROCESSOR MARKET
Samsung plans to invest $116 billion over the next decade into non-memory chips, Reuters previously reported. Chips produced in Austin are currently thought to be limited to less advanced 14-nanometer process nodes, according to Nikkei. Samsung hopes to begin offering chips based on 3nm processor node technology in 2022. While the South Korean giant’s strength has traditionally been in memory chips, Bloomberg notes that the market for logic devices like smartphone and computer processors is more profitable.
Samsung’s plans for the plant are reportedly still in their preliminary stages, but some initial steps have already been taken. Nikkei reported in December that Samsung had already acquired a 440,000-square-meter plot in Austin, where it’s had a manufacturing presence since the 90s. Last year, city officials began reviewing the company’s request to rezone the land for industrial use. Closing the deal could be dependent on Samsung negotiating controversial tax benefits and subsidies from the Biden administration, though Bloomberg reports it may also go ahead without them.
Samsung already manufactures chips for Qualcomm and Nvidia, and is reportedly close to signing a new deal with Intel. The Korea Times reports that Samsung could produce 15,000 graphics chips for Intel starting in the second half of this year at Samsung’s Austin plant. Incoming Intel CEO Pat Gelsinger has said outsourcing may be a part of the company’s future, saying that although company plans to continue producing the majority of its chips internally, it may outsource the manufacturing of “certain technologies and products” in 2023, the WSJ reports.
With its investment, Bloomberg notes that Samsung is capitalizing on a growing trend for companies like Microsoft, Amazon, and Google to design their own chips and outsource manufacturing to companies like Samsung and TSMC. As well as making chips for others Samsung also produces its own Exynos-branded processors for use in its smartphones.
Samsung still faces a big challenge competing with TSMC, which plans to invest $28 billion this year alone. In contrast, Samsung’s semiconductor business invested $26 billion last year in capital expenditure, and Bloomberg notes this was mainly in support of its memory business.
The investment could be complicated by the availability of Samsung heir and de facto leader Jay Y. Lee, who was recently ordered back to prison for two years and six months on bribery charges.