Samsung mulls extra $7.2B for Taylor chip plant ahead of U.S. summit

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Samsung mulls extra $7.2B for Taylor chip plant ahead of U.S. summit

Published: 19 Aug. 2025, 14:32 Updated: 19 Aug. 2025, 16:52

LEE JAE-LIM
[email protected]

Audio report: written by reporters, read by AI

The Samsung Taylor semiconductor plant on April 16, 2024, in Texas [AFP/YONHAP]

[NEWS ANALYSIS]

Samsung Electronics may inject an additional 10 trillion won ($7.2 billion) into its semiconductor complex in Taylor, Texas, with industry sources and diplomatic signals pointing to renewed momentum.

The potential expansion is fueled by two factors: a $16.5 billion chip order from Tesla, to be produced at the site, and the upcoming Korea–U.S. summit on Monday, which will likely serve as a platform for Korean conglomerates to announce major U.S. investments.

The timing is further shaped by looming U.S. semiconductor tariffs, which President Donald Trump warned could reach 200 percent to 300 percent for companies lacking local production. Samsung and SK hynix are shielded, at least for now, thanks to their large U.S. investments. Samsung has pledged $37 billion to Taylor, and SK hynix is spending $3.87 billion on advanced packaging and a research and development (R&D) hub in Indiana dedicated to high bandwidth memory (HBM). Seoul has also secured the “most favored nation” pricing model, which would align Korean tariffs with those of the European Union at roughly 15 percent, far below Trump’s threat level.

Extra investment under review
Samsung’s Taylor project was initially pegged at $44 billion, covering two advanced foundries for 4-nanometer and 2-nanometer nodes, an R&D center and a packaging facility. The packaging line — worth roughly $7 billion — was cut after the company failed to secure anchor customers. Now, reports from outlets including Yonhap suggest Samsung could revisit the plan, restoring packaging capacity alongside expanded investment in equipment and materials.

“Capital expenditure will increase further in preparation for next year’s start of operations at the Taylor facility,” Samsung said during its July earnings call. Tesla and X owner Elon Musk also hinted that the Tesla contract could scale well beyond the headline number, calling the $16.5 billion “just the bare minimum.”

Still, Samsung has downplayed immediate changes. “Progress on the Taylor facility is going as planned,” a company spokesperson said. “We expect to start mass production by the end of 2026.”

Construction milestones are lining up: The first cleanroom is set to finish in November, with auxiliary equipment installation beginning by year-end and production tools arriving in early 2026, according to SK Securities. Capacity is estimated at 30,000 wafers per month in 2025, with eventual design output coming in between 150,000 and 200,000 wafers per month.

Industry analysts remain guarded. “While there’s talk of additional spending, it doesn’t seem likely in the immediate term, even with the Tesla order,” one analyst said. “Tape-outs — trial wafer runs to fine-tune performance and verify functionality with customers — still need to be completed. Only after those evaluations are successful can Samsung justify billions more in capex.”

U.S. foundry race heats up
Samsung’s possible expansion would also play into the wider foundry rivalry with TSMC, which is set to roll out 2-nanometer production in Taiwan later this year, but won’t bring the process to its $300 billion Arizona complex until 2028.

Even then, TSMC Chairman and CEO Che Chia Wei has said that only about 30 percent of 2-nanometer output will come from the United States, with the bulk concentrated in Taiwan — a “Taiwan-first” strategy closely linked to the island’s security calculus.

By contrast, Samsung is building 2-nanometer capacity both in Korea and at Taylor on a similar timeline, positioning itself to offer U.S. clients earlier access to leading-edge nodes. This could prove pivotal as U.S. companies — from Tesla to Nvidia and Apple — seek a reliable advanced chip supply within U.S. borders.

Although not directly tied to the Taylor project, Samsung has also scored notable recent wins in its foundry business. Nintendo selected Samsung to fabricate the custom Nvidia chip set powering the Switch 2, a departure from its usual reliance on TSMC. More recently, Apple tapped Samsung’s facility in Austin, Texas, to produce advanced image sensors for future iPhones, part of the company’s $100 billion American Manufacturing Program, which was launched to expand U.S. production under mounting trade pressure from the Trump administration. Together, the deals mark rare breakthroughs for Samsung Foundry as it works to broaden its customer base and close the gap with TSMC.

BY LEE JAE-LIM [[email protected]]