Reports indicate that semiconductor giant Samsung has picked Taylor, Texas as the site for a $17 billion wafer fabrication plant.
In recent days, Williamson County and the city of Taylor had seemed to emerge as the frontrunner to land a $17 billion chipmaking plant planned by Samsung.
Now, it seems the technology giant has indeed picked the small Central Texas city as the site for its next major operation, according to media reports.
Citing unnamed sources with knowledge of the decision, the Wall Street Journal reported Monday night that Samsung has picked Taylor over sites in Austin, Arizona and New York.
Samsung has not formally confirmed the decision, and a company spokesperson did not immediately respond to messages left by the American-Statesman on Monday evening. However, the announcement is expected to be made in a news conference with Gov. Greg Abbott at the Texas Capitol on Tuesday afternoon.
If Samsung does, in fact, build the facility at the Taylor site, it will be the latest in a stunning run of economic development wins for the Austin area, and for its technology sector in particular.
Tesla announced Oct. 7 that the automaker will move its corporate headquarters from California to Austin. That news came 15 months after Tesla chose an Austin-area site as the home for its $1.1 billion manufacturing facility. Software giant Oracle announced last December that it was moving its corporate headquarters from California to Austin, and a number of other technology giants — including Apple, Facebook, Google and Amazon — have recently expanded their operations in Central Texas.
Samsung recently overtook Intel as the largest semiconductor manufacturer in the world, and along with TSMC, those three are also the only real players in cutting-edge under-10nm processes. As I’ve mentioned before, new cutting edge fabs are hideously expensive to build. TSMC is a foundry (which means they fab other people’s chip designs), while both Samsung and Intel are integrated device manufacturers (IDMs), meaning they fab their own designs, though I think both dabble in foundry work as a sideline. (Samsung is also one of the largest flat panel screen manufacturers in the world; flat panel manufacturing uses semiconductor manufacturing techniques, but is fundamentally a different industry, and just about all flat panels are produced in Asia these days.)
The decision to eliminate New York from the list was probably quite easy. Back when IBM was running it’s state-of-the-art fabs in East Fishkill, there was considerable technological infrastructure in the state. Back In The Day IBM had some of the most respected process technology knowledge in the industry. But then they got out of the manufacturing business, and the East Fishkill fab got sold to Global Foundries, who later sold it to ON Semiconductor. But today New York constantly ranks among the worst states in the nation for business environment, due to high taxes, excessive regulation, and the gradual decay of infrastructure and institutions that comes with one-party Democrat control.
Arizona is a much stronger candidate. Intel has a huge complex of modern fabs in Chandler and TSMC is building a state of the art fab in Phoenix proper, which means there’s a lot of local talent and infrastructure to draw on. A purple state, Arizona usually ranks in the top ten for a business-friendly climate, but they do have a personal income tax.
Texas, by contrast, is constantly rated as the top or second best business climate the the country (occasionally losing to Florida), and has no state income tax. Samsung already has a fab in Austin, along with older legacy fabs from NxP (ex-Motorola) and Infineon, along with significant presence by the major semiconductor equipment manufacturing giants (Applied Materials, Tokyo Electron, etc.). Taylor is close enough to Austin to draw on the technical talent and infrastructure there, without having to worry about the crazy left-wing politics, as Williamson County, while having turned a bit more purple lately, is still safe Republican territory.
Another solid reason to locate in Taylor: ERCOT is headquartered there, which means the area will never be power-cycled in an emergency. The winter storm evidently cost Samsung $268 million in lost revenue from the outage, which I can well believe. When the power goes off, all the equipment needs to be requaled, which is a long, painful process for a single machine, much less the some 200+ needed in a modern fab.
America has lots of tech hubs: Silicon Valley, Seattle, the North Carolina triangle, greater Boston, etc. But nobody is building cutting edge fabs in those areas. Central Texas has rapidly expanding software, hardware and silicon industries.
Austin is primed to be one of the greatest global tech hubs of the 21st century, assuming Austin political leadership doesn’t screw it up…
Tags: Arizona, Austin, Economics, ERCOT, New York, Samsung, Semiconductors, Taxes, Taylor, technology, Texas, Williamson County
Your link goes to a very interesting article. That has nothing whatsoever to do with Samsung.
Crap. Fixed.
A couple of minor points of order…
o Samsung actually has a very large amount of foundry business; they are rare in being able to make the two tracks (IDM and foundry) work well – as far as I can tell, they run them pretty much as independent business units; they may even use different fabs for the two different business units, but I’m not sure. TSMC is still a pure-play foundry (as it has always been), and Intel is an IDM that is trying to maybe do some foundry work (they intermittently have over the years).
o Not sure exactly what counts as “sub-10nm” – oftentimes a smaller minimum geometry process will appear in the business, but it’s just the same process as something extant-and-larger, made possible because learning has led to better process control, which allows the geometry to be slightly reduced in what is otherwise the same process. But in terms of the real sub-10nm process nodes (7nm, 5nm, etc.), Intel has notably fallen flat on their face over the past couple years trying to get a 7nm process into manufacturing – while TSMC and Samsung have gone blowing right past them. Intel has been showing the same sorts of symptoms that IBM’s semiconductor unit showed 30 years ago (lots of ego, but poor actual results).
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