Samsung Electronics’ ambitious project to build a semiconductor plant in Taylor, Texas, has hit several roadblocks, delaying its completion and raising concerns about its future. The company broke ground on the Taylor plant in the first half of 2022, but as of the end of last year, the construction progress rate was only 59.7%.

According to industry sources September 3, U.S. media outlets have reported that it would be difficult for the plant to start mass production of advanced semiconductors by the initially planned 2026.

During its Q1 earnings conference call this year, Samsung Electronics announced that the mass production timeline for Taylor Plant 1 had been postponed to after 2026. This delay is attributed to rising construction costs and the lack of timely government subsidies. Despite the U.S. government finalizing $6.4 billion in subsidies for Samsung’s projects in April, the actual payment has not yet been made.

Adding to the challenges, a local construction worker performing sheet metal work at the Taylor plant suffered severe injuries last month. The worker, who sustained fractures to the head, ribs, and leg bones when a duct structure fell from a forklift, has filed a $1 million compensation lawsuit against Samsung Electronics. The company responded to local U.S. media, stating, “The worker is a site supervisor from a subcontractor involved in the Taylor plant construction. We are reviewing the details (of the compensation claim) and wish for his speedy recovery.”

The worker’s lawsuit alleges that Samsung Electronics was aware of the facility issues and risks but failed to provide proper training and management. This incident underscores the legal and safety challenges that large construction projects often face.

Samsung Electronics plans to invest $44 billion to build two semiconductor plants and an advanced packaging R&D center in Taylor, Texas. However, the delay in government subsidies and rising construction costs have significantly impacted the project’s timeline. There is also speculation that Samsung might switch from a 4-nanometer to a 2-nanometer process at Taylor Plant 1, which could further complicate the project.

The semiconductor industry is crucial for technological advancement and economic growth, with semiconductors being essential components in modern electronics. The global semiconductor shortage, exacerbated by the COVID-19 pandemic, has prompted major investments in semiconductor manufacturing capacity. The U.S. government has been offering substantial subsidies to encourage domestic semiconductor manufacturing to reduce dependency on foreign suppliers and enhance national security.

However, securing specialized labor remains a significant challenge for the Taylor plant. The U.S. labor market for specialized skills in semiconductor manufacturing is highly competitive, with companies like Samsung, TSMC, and Intel vying for a limited pool of skilled workers. This competition can lead to project delays and increased costs.

The current status of the Taylor plant project remains uncertain, with the mass production timeline pushed beyond 2026. The semiconductor industry anticipates intensified competition for talent among global companies, which could further impact the project’s progress. As Samsung Electronics navigates these challenges, the outcome of the compensation lawsuit and the resolution of subsidy payments will be critical factors in determining the future of the Taylor plant.