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Samsung says it will build $17B chip factory in Texas

Samsung chip plant announcement
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Samsung chip plant announcement in Texas, 11/23/21

(AP & WXXI News) Samsung said it plans to build a $17 billion semiconductor factory outside of Austin, Texas, amid a global shortage of chips used in phones, cars and other electronic devices.

"This is the largest foreign direct investment in the state of Texas, ever," Texas Gov. Greg Abbott said in announcing the project Tuesday.

Samsung said it will start building the Texas plant next year and hopes to begin operations in the second half of 2024. The South Korean electronics giant chose the site based on a number of factors, including government incentives and the "readiness and stability" of local infrastructure, said Samsung Vice Chairman Kinam Kim, speaking alongside the Republican governor.

Samsung had previously indicated it was exploring sites in Texas, Arizona and New York for a possible new U.S. chip plant. It has had a chip fabrication plant in Austin, Texas, since the late 1990s. But most of its manufacturing centers are in Asia.

Officials in Western New York as well as NY Senator and Senate Majority Leader Chuck Schumer had been pushing for the Samsung plant to be located at the Genesee County ‘STAMP’ business park in the Town of Alabama. Schumer had said that after he reached out to Samsung officials, they visited the STAMP campus in August to look at what that site had to offer.

In a statement provided by his office on Wednesday, Schumer said he believes STAMP remains a leading site for companies looking to locate or expand in New York, as recently evidenced by Plug Power’s decision to build its new green hydrogen fuel production facility there.

Sen. Schumer’s primary focus remains working closely with Genesee County and New York State officials to push companies that are actively considering STAMP to locate here,” said Schumer spokeswoman Allison Biasotti.

Steve Hyde, the president and CEO of the Genesee County Economic Development Center, told WXXI News that the county was aggressively courting Samsung over the last year.

Hyde is sorry Samsung won’t be locating its chip plant in Western New York, but he said the region proved something just by being in the mix among the sites under consideration.

“We’re very disappointed, of course. But it just proves that this site with the regional assets, the intellectual assets that we have in this region, and the physical assets and the support, we really can compete as a region to go after great advanced manufacturing opportunities like this and bring manufacturing back to upstate New York,” said Hyde.

Hyde pointed to the recent decision by the green hydrogen company Plug Power to put in a large facility at the STAMP business park, and he said the county is actively working to find more companies for that site.

The chip shortage has emerged as both a business obstacle and a serious U.S. national-security concern. Short supplies of semiconductors kicked off by COVID-era shutdowns have hampered production of new vehicles and electronic devices for more than a year. New questions of economic and national security are also at stake since many U.S. companies are dependent on chips produced overseas, particularly in Taiwan, which China has long claimed as its own territory.

Samsung said it expects to spend $17 billion on the Texas project, which will make it the company's largest investment in the U.S. It said the new facility will boost production of high-tech chips used for 5G mobile communications, advanced computing and artificial intelligence, and also improve supply chain resilience.