Samsung Electronics is set to establish an advanced semiconductor complex in Taylor, Texas, in the U.S. The plan includes building state-of-the-art foundries for 2-nanometer (nm) process production and advanced packaging facilities to preempt the artificial intelligence (AI) semiconductor market.

On April 15 (local time), Samsung Electronics announced these additional investment plans in the U.S.

The investment announcement coincides with the U.S. Department of Commerce’s disclosure of a subsidy payment to Samsung Electronics. The Department awarded Samsung US$6.4 billion, which constitutes 16% of the total investment amount, a higher ratio than provided to Intel and TSMC.

At the groundbreaking ceremony held at the Taylor site, prominent figures including U.S. Secretary of Commerce Gina Raimondo and Texas Governor Greg Abbott, as well as Kyung Kye-hyun, head of Samsung Electronics’ Device Solutions (DS) division, were present. Secretary Raimondo praised the Taylor plant as becoming “a cornerstone of the U.S. semiconductor supply chain,” to which President Kyung responded that the initiative would “accelerate semiconductor innovation in the U.S.”

With this backing, Samsung Electronics plans to dramatically increase its investment in the U.S. from US$17 billion to over US$40 billion.

This expansion includes constructing additional foundries and advanced packaging and research and development (R&D) facilities in Taylor, Texas, alongside the existing foundry in Austin, Texas, which is also slated for expansion and might employ advanced processes.

Samsung Electronics’ Texas foundry complex is focused on mass production using 2-nm processes. The U.S. Department of Commerce also announced that Samsung would start mass production using 4-nm and 2-nm processes at the Taylor foundry.

Samsung views the 2-nanometer process as a key to closing the gap with leading foundry TSMC. While TSMC announced the application of sub-2-nm advanced processes at its third Arizona plant, Samsung’s focus on 2 nm is seen as a strategic move to compete.

Having successfully mass-produced 3-nm processes in 2022 — a first in the industry — Samsung is preparing for the production of second-generation 3-nm later this year and 2-nm next year. The first foundry plant in Taylor, scheduled to operate in 2026, and a second one completing in 2027, are expected to play a central role in 2-nm mass production.

The application of Gate-All-Around (GAA) technology in 2-nm production is anticipated to boost competitive bidding in the U.S., where major tech companies are concentrated. GAA, a technology first developed by Samsung, improves semiconductor power consumption and performance over the existing FinFET technology. Samsung is also gearing up for mass production of 3-nm GAA in the latter half of this year.

Additionally, Samsung decided to construct advanced packaging facilities in Taylor, following substantial subsidy support from the U.S. Department of Commerce. Kyung Kye-hyun had previously stated at last month’s shareholder meeting that no decision had been made about relocating the packaging business overseas, but the subsidy appears to have influenced the final investment decision.

High Bandwidth Memory (HBM), essential for the AI era, requires advanced packaging technology, as it stacks DRAM vertically to enhance performance and power efficiency.

Samsung established an advanced packaging team in 2022 and has been focusing on this sector, with expectations to generate over US$100 million in revenue from 2.5D packaging starting in the second half of this year.

Once the advanced packaging facility is operational in Taylor, Samsung plans to import HBM chips processed in Korea and complete the packaging in the U.S. for supply to its customers.

Leveraging the new Taylor plant, Samsung intends to actively recruit U.S.-based fabless semiconductor design companies as foundry customers. The U.S. government has been urging local fabless companies like Apple, Nvidia, and AMD, which lack their own production facilities, to manufacture chips domestically.

U.S. fabless companies, responsible for nearly half of the global foundry revenue of US$117.4 billion, have traditionally relied on TSMC’s Taiwanese plants for chip production. By offering state-of-the-art foundry and packaging services in a turnkey format, Samsung is well-positioned to attract a significant portion of this business to its U.S. operations.

An industry insider commented, “Samsung Electronics is compelled to increase its investment in the U.S.,” and predicted, “The competition for U.S. foundry orders, particularly with TSMC and Intel, will intensify.”