Samsung upping Texas semiconductor investment to $44 billion

U.S. chipmaking is getting another boost from South Korean electronics giant, Samsung, which reportedly plans to up its investment into a semiconductor hub in Texas to $44 billion.

Samsung committed $17 billion to build a chipmaking plant in Taylor, Texas outside of Austin in 2021. The additional investments will be used for the hub, which will also include advanced packaging and research and development facilities, the Wall Street Journal reported citing people familiar with the matter. Development on the chipmaking plant started in 2022, but building costs have gone up since then due to inflation and other factors, sources told the Journal. Another chipmaking plant in the area is expected to cost over $20 billion, they added. The advanced packaging facility will reportedly cost $4 billion.

The electronics maker reportedly expects to receive billions in subsidies from the U.S. CHIPS and Science Act, which is part of the Biden administration’s effort to boost chipmaking at home amid AI hype and competition with China. Samsung did not immediately respond to a request for comment, and the U.S. Department of Commerce said it does not comment on potential applicants or applications. However, the Journal reported Samsung is expecting one of the largest payouts from the act to a single company. American semiconductor pioneer Intel recently received $8.5 billion in direct government funding from the act, which will support its plans to invest over $100 million in expanding semiconductor production in the country over the next five years.

Samsung, Intel, and Taiwan Semiconductor Manufacturing Company (TSMC), which has delayed plans for a chipmaking plant in Arizona, are the only three firms capable of producing advanced logic chips that are used in AI development and the national security sector, the Journal reported.

Early Friday, Samsung said it expects its operating profit for the first quarter of 2024 to be $4.9 billion — a 930% increase year-over-year, and far above estimates of $3.9 billion.

Fellow South Korean chipmaker SK Hynix reportedly plans to invest billions into a semiconductor facility in West Lafayette, Ind., that could begin operations in 2028. The company has a partnership with chipmaking leader Nvidia to supply it with high bandwidth memory (HBM) chips, which, combined with Nvidia’s graphic-processor units (GPUs), power leading generative AI models including ChatGPT.