Samsung factory in the U.S.
South Korea's Samsung is now one of the recognised world leaders in semiconductor manufacturing thanks to its near-total dominance of the memory chip market, but it is nevertheless struggling to keep up with rival Taiwan Semiconductor Manufacturing and is investing heavily in improving its chips.
Specifically, Samsung intends to invest about $10 billion to build a new chip manufacturing plant to be located in Texas.
Samsung's plan is to build the most advanced logical chip plant in the U.S. in order to attract more U.S. customers and compete with TSMC.
The Korean company is already busy negotiating to build the plant in Austin, with construction scheduled to start this year and major equipment to be installed in 2022 before the plant goes live in 2023. It will be the first chip manufacturing plant in the US using ultraviolet lithography (EUV), an advanced technology that Samsung is already using to produce the next generation of chips. Today, Samsung has only two plants with EUV technology in Hwasong and in Pyeongtaek, South Korea.
But the benefits from the construction will be mutual: the US government is interested in redirecting employment flows back to its country from Asia, where much of the world's manufacturing in advanced industries has moved heavily over the past couple of decades.
Samsung's customers in the US will also be many: major technology companies such as Microsoft, Google and Amazon, which increasingly have to develop their own chipsets for data centres, and since they don't have their own foundry, they have to rely on partners such as TSMC or Samsung. Having its own factory in the US will allow Samsung to get more orders from these companies.
However, TSMC is already building its own $12bn chip manufacturing plant in Arizona, with plans to launch it in 2024.
The South Korean company has even hired lobbyists in Washington to get any tax breaks and subsidies from the new US administration. Samsung wants a deal even if it does not receive any major incentives from the government.
Samsung vice chairman Lee Jae-yong has already said the company will invest $116bn over the next ten years to upgrade its foundry and chip development business.