Samsung has selected a site near the Texas town of Taylor for its new $ 17 billion (£ 12.7 billion) computer chip plant amid a global semiconductor shortage.
This is the largest US investment ever by the South Korean electronics giant.
The plant is expected to create 2,000 jobs in the technology sector, with construction starting early next year.
Samsung, like many of its rivals, is racing to expand chip manufacturing in the United States to address supply chain problems.
“With increased production capacity, we will be able to better meet the needs of our customers and contribute to the stability of the global semiconductor supply chain,” said Kinam Kim, chief executive officer of Samsung Electronics Device Solutions.
The plant is expected to be operational by the second half of 2024.
It comes when US President Joe Biden pushed the chip giants to increase their US production.
White House officials said the new facility would help “protect our supply chains, revitalize our production base and create good jobs”.
“Increasing domestic semiconductor chip production is critical to our national and economic security,” US Secretary of Commerce Gina Raimondo said separately.
Texas Republican Governor Greg Abbott tweeted “Welcome to Texas, Samsung!” While posting photos of an event to announce the plan.
Welcome to Texas, Samsung!
Samsung will build a new semiconductor manufacturing facility in Taylor, Texas.
➡️ $ 17 billion equity investment
➡️ Thousands of NEW jobs
Largest Foreign Direct Investment in the state of Texas EVER. pic.twitter.com/a7VhbK3B9Q
– Greg Abbott (@GregAbbott_TX) November 24, 2021
Separately, a statement from the governor’s office said the company would be awarded a $ 27 million grant to create jobs in the state.
The chips made in the new facility will be used in a range of technologies including mobile, 5G, high-performance computing and artificial intelligence.
Samsung is one of the largest chip makers in the world with over 20,000 employees in the United States.
The company said the latest announcement brings its total investment in the world’s largest economy to $ 47 billion.
Global chip shortage
The global shortage of chips has caused major disruptions for manufacturers, from automakers having to suspend production to Apple warning that iPhone shipments would be delayed.
Taiwanese chip maker TSMC announced a $ 100 billion investment in Arizona earlier this year, while US semiconductor maker GlobalFoundries announced it will increase its investments in upstate New York.
Global supply chain problems have hit the chip industry particularly hard.
Added to this are other environmental problems that have put a strain on production. You need a lot of water to make fries, hence a drought in Taiwan [a global leader in chip manufacturing] didn’t help matters.
Nor was there a power outage in Texas last winter, stopping production for a while. Texas is the center of the US chip industry.
This will therefore be good news for Joe Biden, who is looking to increase chip production in the United States through generous subsidies.
The only problem is this isn’t a quick fix. Building chip manufacturing plants takes a long time. We won’t see a spade in this project until next year, and it won’t start making chips until at least 2024.
The world is starving for computer chips right now. Demand far exceeds supply and there is simply no easy short-term solution.
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