Samsung’s new investment in Texas has big implications for the US
On April 15, the U.S. Department of Commerce awarded Samsung Electronics $6.4 billion in direct CHIPS Act funding for operations in Texas. This will contribute to a total of more than $45 billion that Samsung is committing to all projects, including a new chip manufacturing facility in Taylor, Texas, and an existing facility in Austin.
Samsung’s investment has several important implications for America’s technological posture. First, this investment will allow us to begin the process of establishing our chip packaging capabilities in the country (integrating all the electronic components of semiconductors into one product). The U.S. accounts for just 3% of chip packaging, and without dedicated facilities, U.S. companies rely on third-party contractors overseas to create the final product. Samsung’s plans for the region include a new advanced packaging facility, so this new investment is perfectly aligned with the Biden administration’s broader economic strategy to ‘Invest, Collaborate and Compete.’ .
Second, the ongoing AI revolution calls for an exponential expansion in the variety of high-bandwidth memory (HBM) chips developed by Samsung and SK Hynix, while increasing AI development. Large-scale language models (LLMs) require large data sets to train. substantial memory capacity. The $52 billion secured by the CHIPS Act and additional investments such as Samsung’s recent announcement in Taylor, Texas, will help memory-intensive AI data centers in particular grow as a complement to AI deployments across the commercial spectrum. Among them, it helps ensure that the United States meets its needs.
Finally, and most commonly understated, reshoring the types of chip production traditionally done in partner countries with more specialized capacity may be It protects it from the kind of geopolitical risks inherent in the growing likelihood of action on the Korean Peninsula. If a long-term effort to re-land is not made, the US will not be exposed to either country’s outsized role in the production of logic chips (as in the case of Taiwan) or memory chips (as in the case of South Korea). , meaning the United States could be cut off from economic growth. This technology pales in comparison to the semiconductor shortage caused by the coronavirus in the event of a conflict in the Pacific.
Certain realities need to be considered, such as failure to secure the required number of skilled workers and the possibility that President Trump’s second term could change parts of the CHIPS Act, but overall, Samsung ‘s significant investment in Texas builds on its decades-long legacy of producing advanced technology. Decentralizing the strategic technology supply chain will help put the United States in a more secure position. As the development of AI and the production of advanced chips become a hallmark of this century’s geopolitical competition, investments like Samsung’s recent investment in Texas are essential to securing America’s technological future.
Tom Ramage is an economic policy analyst at the Korea Economic Research Institute. The views expressed here are the author’s own.
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