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Market battle: Samsung expands U.S. factory to compete with TSMC

South Korea’s Samsung Electronics expands its semiconductor factory in Texas, USA.

Yesterday, South Korea’s Samsung Electronics announced that it will expand its semiconductor factory in Texas, the United States, to make room for the placement of next-generation manufacturing equipment. Contacting the news of TSMC’s construction of a new factory in Arizona, Samsung’s move may be intended to break TSMC’s previously established capacity and technological advantages and seize the title of “the world’s largest contract chip manufacturer” from TSMC.

Leading technology companies such as Google, Facebook and Amazon are all in the US market. Although these companies have self-developed chip technologies, they all need to be produced by foundries, and the market prospects are broad. At present, both Samsung and TSMC are increasing investment in the construction of new production lines to develop a larger US market.

As the world’s largest chip foundry, TSMC is at the leading level in both technology and production capacity. It is not easy for Samsung to compete with the industry leader for the US market.

“In order to become a global leader, Samsung needs to attract orders from Apple, Intel and other companies currently working with TSMC,” said Lee Seung-woo, chief analyst at Eugene Investment Securities.

Samsung believes its factory in Austin, Texas, plays a vital role in securing orders from U.S. technology companies. Local city officials recently began reviewing Samsung’s request to rezon the newly acquired 440,000 square kilometers of land for industrial use.

Samsung announced plans to invest 133 trillion won ($121 billion) to achieve its goal of becoming the world leader in memory semiconductors and logic chips by 2030. The company is increasing capacity at its South Korean plant in Pyeongtaek and may bring advanced domestically developed chip-making technology to the Austin plant.

Samsung said the expansion is part of its preparations for the future, but has not yet decided how much capacity it will add there and when.

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