Samsung Electronics has postponed the start of mass production at its new semiconductor factory in Taylor, Texas, to the year after next. Initially, mass production was expected to begin by next year. The delay is speculated to be due to issues related to U.S. government subsidies and various permit complications. Uncertainties regarding economic recovery also seem to influence Samsung Electronics’ investment decisions in the region.
On Dec. 25, Choi Si-young, the President overseeing the foundry (chip contract manufacturing) business at Samsung Electronics, announced during his keynote speech at IEDM 2023 in the U.S. that “the first wafer would be produced in the second half of next year at the Taylor factory, with mass production commencing in 2025.” This marks a significant shift from the original plan announced at the time of the initial investment in 2021, which aimed for mass production by the second half of 2024.
Industry insiders now expect only a small volume of equipment setup rather than full-scale operation next year at the Taylor facility. Plans are in place to install a line capable of producing 5,000 12-inch wafers per month (5K) after the first half of next year. This is relatively modest compared to Samsung Foundry’s recent construction of a large-scale 4-nanometer (nm) line at Pyeongtaek 3 Plant (P3), capable of handling 28,000 wafers per month.
Samsung Electronics’ Taylor factory, into which the company has been investing US$17 billion over the past two years, is a semiconductor fab being constructed in Texas. Spanning a kilometer in length, the site has sufficient space to accommodate up to ten additional fabs beyond the first one. The initial line at this factory is set to produce 4-nm system semiconductors.
Various reasons are cited for the changed timeline of the Taylor fab’s mass production. A key issue is the delay in the disbursement of U.S. government subsidies. The U.S. government had promised a total of US$52.7 billion in subsidies to companies building semiconductor plants locally as part of the CHIPS Act. However, reports emerged last month about a potential advance payment of up to US$4 billion in subsidies to Intel by the Biden administration, raising concerns about possible prioritization of domestic companies over Samsung Electronics in subsidy allocation and timing.
Sensing this atmosphere, Samsung Electronics’ U.S. branch also conducted events urging U.S. politicians to expedite the subsidy process. They emphasized that “Samsung’s semiconductor investments over the past 30 years total US$47 billion. Samsung’s decision to invest ahead of the CHIPS Act decision was based on trust in the U.S. Congress and administration,” urging timely subsidy disbursement. Additionally, building permit procedures by the U.S. government are also speculated to be a contributing factor to the delay.
The market’s uncertainty is another concern within Samsung. While the industry predicts a recovery from the severe semiconductor demand slump that began in the latter half of last year, there is speculation that decisions may be further delayed depending on the market situation.