Tech giant Samsung Electronics said it selected Taylor, Texas as the location for a new $17 billion chip plant, instead of state capital Austin.
Samsung, the world’s biggest memory chipmaker and second-largest contract chip manufacturer, had also considered sites in Arizona and New York but said it chose Texas, where it has its only other U.S. chip plant, based on factors such as infrastructure stability, local government support, and proximity to its existing plant.
Samsung will make advanced chips for functions such as mobile, 5G, high-performance computing and artificial intelligence at the Texas plant.
The plant would create 2,000 high-tech jobs with construction to begin in the first half of next year, and production due to start in the second half of 2024, the South Korean tech giant said. It would also create at least 6,500 construction jobs, Texas Governor Greg Abbott said.
Samsung is joining rivals TSMC and Intel in the race to expand chip contract manufacturing in the United States, where the sector is seen as an area of strategic competition with China.
U.S. President Joe Biden’s administration has promised billions of dollars in federal funding to boost chip manufacturing and research to ensure it has an edge over China in advanced technologies and to address shortages for critical industries like autos.
“Securing America’s supply chains is a top priority for President Biden and his Administration,” U.S. National Economic Council Director Brian Deese and National Security Advisor Jake Sullivan said in a statement welcoming Samsung’s investment.
Texas last winter suffered a multi-day, widespread power outage, causing some 300-400 billion won ($254-$339 million) in damages to Samsung’s existing chip plant in Austin, Texas.
The site in Texas’s Williamson County, which comprises the city of Taylor, offered the best incentives package of the sites Samsung was considering, Reuters reported.
Samsung has not specified what the new plant will make beyond advanced logic chips which can be used to power mobile devices and autonomous vehicles.
Analysts said it would make chips of 5-nanometres or less, using machines made by the Netherland’s ASML, for large clients like Qualcomm. Such chips can handle more data per area than the 14- and 28-nanometre chips Samsung’s existing U.S. plant in Austin mainly makes.