Samsung’s new semiconductor factory under construction in Taylor, Texas, is a site worth visiting. In this new era of trade policy and the progress of domestic semiconductor manufacturing, you occasionally hear court cases about the maximum construction charge in the United States or how complicated it is. it’s getting things done. The Semiconductor Industry Association reported that the United States is not a competitive country in terms of costs, basically due to hard work prices and government incentives. But we don’t hear the court cases from that part of the country. . And while the scale of the site was impressive (they do bigger things in Texas), I took away 3 messages about the importance of this project.
Taylor’s site represents a $17 billion investment, which is part of the more than $47 billion the company has invested in the U. S. During the expected life of the project, the company could potentially build several plants here as a secondary group to its Austin site. At the same time, a set of buildings for the supply of chemical and fuel products, an application building, a work building, the production plant and a parking lot were being constructed. “secondary” infrastructure, adding bulk fuel facilities, a water reclamation facility and an electrical substation.
The soil type in Williamson County, where Taylor is located, is typically clay, so the production plant and main buildings are suspended from wells drilled into the ground in order to eliminate ground vibrations. This meant drilling 20,000 holes and installing pillars. 110 feet below the floor. This meant a huge amount of concrete, provided through five concrete plants on site to produce 650,000 cubic meters of concrete. A Union Pacific railroad adjacent to the site used to transport 2. 7 billion pounds of aggregate.
The 1,200 acres are nearly twice the length of Samsung’s flagship campus in Pyeongtaek, South Korea. And the vision of this is to be vertically incorporated and be as autonomous as possible, just like it is in Korea. It’s simple inspired through the scale of this structure project.
As we walked around the site, I saw giant special exhaust pipes 14 feet in diameter. They are closely manufactured by Belton in a partnership that Samsung helped identify between a Korean company and a local company. They told me, “The most productive way to make sure our desires are fulfilled is to expand a local industry that is capable of satisfying us. “We’ve done this with a handful of key elements where we can see the capacity that exists particularly or to a greater extent in Korea. »
As a result, Samsung’s Project Taylor may attract about a dozen corporations to Texas with this expansion into the United States. The Williamson County Economic Development Association (WilCo EDP) recently opened a net in Korea to ensnare other corporations to identify operations in the country. WilCo EDP goes beyond semiconductor suppliers and also targets life sciences, automotive, and software corporations. Interestingly, KOTRA recently opened its own in Austin.
To speed up construction, the facility’s design made extensive use of precast concrete, a material typically used only for long-span bridge girders and parking lots. “We needed to expand a local industry that could handle the volume we needed in the “For the first phase of construction, Samsung used thousands of prefabricated elements, such as columns, embossed slabs, and other components, absorbing all of Central Texas’ prefabricated capacity.
Continuing further, we saw an air separation plant that will produce liquid nitrogen and argon. The company will also install electrolyzers to obtain hydrogen. Most of the company’s production materials for its existing plant in Austin are sourced domestically, as they must be able to source risks and the company plans to continue this practice at Taylor. This has the merit of generating a wide diversity of functions for local providers. Samsung’s existing production facility in Austin spent $5. 1 billion locally in 2022 (including payroll).
Taylor, Texas, USA
We’ve heard from foreign corporations about the time it takes to build new facilities in the United States. Building something of Taylor’s stature is an extremely complex process. Thousands of people worked at the site, spread across employees of Samsung, its top-tier subcontractors. and many subcontractors. If fabrics arrive late or approval for a building inspection is expired, many other people end up waiting, costing you hours or days before you can start producing a product and earning income. Although I’m sure there were countless disruptions every day, you may feel the need to stick to the schedule, it’s palpable. The company keeps a giant source of production fabrics on-site to protect itself from disruptions from the source chain, and you might just see it. conscientiously organized.
Obviously, Samsung appreciates having the city of Taylor as a partner. “We meet with them at least once a week. More than anything, it’s a daily inspection schedule; We haven’t had any delays in our entry permits,” I was told. By comparing authorizations and inspections completed on time, Taylor’s team achieved parity with Korea in preventing delays. The city reviews tens of thousands of permit programs with a turnaround time typically less than a month. As my consultant explained, “It’s not enough for the city to do its part, we want to make sure that we’re structured in a way that we’re in a position to respond to any requests we receive from the city. . . We want to make sure that those who design files or allow entry are not available, we want to process them as temporarily as possible.
The company has obtained economic progress incentives from the city, county, and state of Texas. It also partners with local schools, workforce advancement agencies, and veterans groups to provide and exercise the future workforce they will need. According to studies through a third-party firm, Samsung’s economic impact in the region through its operations in Austin and Taylor structural sites combined amounted to $13. 6 billion in 2022 alone.
We’ve heard a lot that the cost of running a semiconductor factory is higher in the US than in Asia, not to mention the complex node Samsung has committed to. Taylor will make the chips for Samsung’s new 4nm designs. There is no doubt that the investment tax credit (ITC) that is part of the CHIPS Act and all potential CHIPS Act subsidies will help cover the costs of those investments to begin with. But the company has made it clear that it plans to succeed there. just as it does on its Samsung Austin Semiconductor (SAS) site, which has been in operation for 27 years. They said it was imperative to do so as part of their commitment to their consumers and the local community.
We don’t hear much about the existing site in Austin, however, by my calculations, it’s the largest foundry in the United States, maybe among three, or even a little more. There they make chips for “factoryless” corporations that concentrate exclusively on design. The site started making DRAM memory chips, then added flash memory before moving on to logic. Today they make chips ranging from 65 nm to 14 nm. Jon Taylor, vice president of Fab Engineering at the Austin Fab location, was confident they were “solidly profitable. “It is one of the main economic engines of the region.
Samsung shows great confidence that, despite the challenges, it will allow Taylor to operate and turn a profit. In fact, they make sure to stagger the structure to make sure it keeps up with the market demand. But when talking to management, they have no doubts about their ability to pull it off.
I was recently talking to a senior executive at Toyota and he told me that when they started making products in the US, they weren’t sure if they were going to make money, but they partnered with local suppliers and worked to build an ecosystem, partnering with schools, governments and local businesses. They have been a huge success in the United States and are indeed a role model. Samsung has also been working on this for almost 3 decades and has understood it. We can learn a lot from them.