Samsung Plans to Manufacture Semiconductors in the US

Samsung Plans to Manufacture Semiconductors in the US

Samsung is investing $13 billion in a chip-making factory in the US, which would employ 1,900 people by October 2022.

Three location alternatives are being considered: Texas, Arizona, and New York.

Samsung will be competing with Taiwan Semiconductor Manufacturing Co. for the top leadership position in the $400 billion chip-making industry in the US.

Video Spotlight: 

This post is based on The Hill article, Samsung considering investing billions in US chip plant, by Lexi Lonas, January 23, 2021; the KVUE article and video, Samsung reportedly considering $10B chip-making plant in Austin, by KVUE News Staff, Jan 22, 2021; and the YouTube video in the Spotlight. Image source: MS Mikel/Shutterstock

Discussion Questions:

1.  How does Samsung compete operationally in the chip-making industry of the US?

Guidance: To achieve the goal of becoming the top chipmaker in the US by 2030, Samsung needs a local presence to catch up with Taiwan Semiconductor Manufacturing Co.. Having a chip-making factory based in the US is the first step towards that goal.

2.  What are the location factors being considered by Samsung in building a chip-making factory in the US?

Guidance: The location factors include (1) chip-making incentives with funding from the National Defense Authorization Act; (2) tax incentives from local government; (3) availability of skilled labor; (4) operating costs such as raw materials, transportation, labor; and (5) supply chain considerations such as proximity to raw material suppliers.


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