South Korea's Samsung has invested billions in the U.S. and plans further spending to expand chipmaking capacity there. (Source photos by Samsung)
KIM JAEWON and CHENG TING-FANG
July 3, 2025 17:36 JST
SEOUL/TAIPEI -- Samsung Electronics is delaying completion of a semiconductor factory in the U.S. state of Texas, as the South Korean chipmaker struggles to find customers for the plant's output, sources familiar with the matter told Nikkei Asia.
Samsung has said it will invest more than $37 billion in Texas in the coming years, having been awarded a grant by the Biden administration of up to $4.7 billion in December under the CHIPS and Science Act, which aimed to advance U.S. technology leadership.
That investment includes a facility in Taylor, Texas, which is meant to manufacture cutting-edge chips and was originally meant to come online in 2024. That timeframe has already been pushed back to 2026.
"The process [of completing the Taylor fab] is delayed because there are no customers. [Samsung] is not in a situation where it can do something, even if it brings equipment in at the moment," a source close to the situation said, asking not to be named.
A chip supply chain executive familiar with the matter also told Nikkei Asia that Samsung, which already makes chips in Austin, Texas, is in no hurry to install chipmaking equipment in the new plant.
"Local demand for chips isn't particularly strong, and the process nodes Samsung planned several years ago no longer meet with current customer needs," the executive said. "However, overhauling the plant would be a major and costly undertaking, so the company is adopting a wait-and-see approach for now."
Another industry source close to the matter said Samsung initially planned to offer 4-nanometer chipsets, but later changed its plan to include more advanced 2-nm ones to meet customer demand.
Documents from Samsung C&T, a construction affiliate of Samsung Electronics that is building the Taylor fab, show that construction was 91.8% complete as of March. Construction was initially scheduled to be completed by April 2024, but that was pushed back to the end of October this year, according to the company's filing with the South Korean financial regulator in May.
Samsung Electronics told Nikkei Asia that it still plans for the fab to open in 2026, four years after construction began, and said the project is going smoothly. The company declined to give a more precise timeline or to comment on the outlook for equipment installation at the fab. Samsung did not comment on whether it is having trouble finding customers.
The delay comes as Samsung struggles to narrow the gap with rival Taiwan Semiconductor Manufacturing Co. TSMC dominates the contract chipmaking market, holding a 67.6% share of the global market by revenue in the first quarter, followed by Samsung at 7.7%, according to Trendforce data.
Samsung's delay in completing its U.S. plant underscores the challenges chipmakers face when expanding into other parts of the world. TSMC, for instance, encountered significant construction delays and a labor crunch when it started building its first cutting-edge plant in the U.S., in Arizona.
However, that plant finally entered mass production at the end of last year and TSMC has secured major AI chipmaking clients in Nvidia, AMD, Amazon and Google. The Taiwanese chip giant announced a further $100 billion investment early this year to build advanced chipmaking and packaging facilities in Arizona.
Samsung's pause in Texas is happening against the backdrop of global economic headwinds. While demand for cutting-edge chip production for AI applications continues to grow, demand for chips used in smartphones, computers, consumer electronics and cars has yet to show signs of a meaningful recovery. China's push to localize chip production in response to tensions with the U.S. is further impeding a rebound in the global chip market. The rise of Chinese players is leading other chipmakers, such as United Microelectronics Corp., to seek new growth drivers.
Analysts say Samsung's contract chipmaking business is struggling with yield, a key metric for assessing production quality in chip manufacturing.
"Samsung Foundry faced unstable yields and order losses. Although yields have since improved, U.S. restrictions on high-end chip production for China have further weighed on the company, keeping its capacity utilization below the industry average," Joanne Chiao, a Trendforce analyst, told Nikkei Asia. "But they do try to engage and attract more U.S. customers. ... The plant does have a chance to generate small output if subsidies and tax credits are in place. However, whether it will scale up significantly depends on the progress of customer engagement."
Samsung says it is improving yields for its 2-nm process and securing additional orders for sub-5-nm tech, specifically the 2-nm and 4-nm nodes used for AI and high-performance computing applications.
Samsung delaying completion of US chip plant due to lack of customers
South Korean chipmaker in no rush to install equipment at Texas factory
asia.nikkei.com
