Samsung moves toward second chip factory in Taylor as demand surges

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Samsung moves toward second chip factory in Taylor as demand surges

Published: 17 Mar. 2026, 05:00

LEE JAE-LIM
[email protected]

Audio report: written by reporters, read by AI

Samsung's Taylor plant in Texas, which is scheduled to start mass production in 2027 [TAYLOR CITY]

Samsung Electronics is preparing to build a second chip factory at its semiconductor cluster in Taylor, Texas, as major U.S. tech companies line up to place their orders amid strained capacity at Taiwanese rival TSMC.

The project has entered the early stages of regulatory preparation, after the Taylor City Council approved an amendment extending its contract with HDR Engineering, a U.S. company which provides permitting and construction inspection work for the Samsung Taylor campus. Council documents dated on Feb. 26 and Thursday show that the extension allows the city to continue supporting regulatory review for the planned second factory.

“Consider approval of Amendment No. 1 to Task Order No. 42 with HDR Engineering, Inc. for development permit review and code compliance inspection services related to the development of the Samsung 'Fab 2' project,” the Feb. 26 city council agenda packet reads. Documents dated Thursday show that the motion passed unanimously.

The planned Fab 2 facility is estimated to span about 2.7 million square feet, the same size as the Fab 1 building currently under construction.

HDR Engineering will perform reviews for the fab design, assist Samsung in securing building permits and handle permit issuance, as well as conduct construction code inspections, which are safety and compliance checks during the build to make sure the project follows approved plans.

Construction will begin once the building permits are issued.

Beyond Fab 2, more factories could follow. Samsung purchased 1,268 acres of land in Taylor to build its semiconductor cluster, which is large enough to accommodate up to 10 fabs. Samsung selected Taylor as the site for its second U.S. semiconductor foundry in November 2021 and began construction in 2022. The project was initially announced as a $17 billion investment, which was later expanded to total $37 billion, including a $4.75 billion subsidy from the U.S. government under the CHIPS and Science Act.

A Samsung, Texas, Korea, and United States flag hang in front of the Samsung semiconductor chip plant in Taylor, Texas, inJanuary 2024. [EPA/YONHAP]

The campus will focus on producing chips for high-performance computing (HPC) and automotive applications using the company’s 2-nanometer process. Digitimes reported Wednesday that Samsung has already secured 121 customers for the campus. Potential large orders could come from major technology firms such as Google, AMD and ByteDance.

The first plant is preparing to start mass production next year as part of Samsung’s deal with Tesla. The company nabbed a $16.5 billion contract to manufacture Tesla’s AI5 and AI6 chips, though it remains unclear whether extra orders from Tesla have expanded the scope of the deal, which previously covered only AI6 chips.

Tesla CEO Elon Musk previously stated on X that mass production of the AI5 chip is expected around mid-2027.

Samsung has recently posted 180 job positions for the Taylor site, covering roles in facilities and infrastructure development, tool installation and equipment readiness, yield engineering and manufacturing support.

The company also obtained a temporary permit from Taylor City covering about 88,000 square feet within the first facility, according to city officials in February, indicating that partial operations have already begun in that space.

Under Samsung’s agreement with the city, the company needs to complete a total of 6 million square feet of campus facilities, including manufacturing space, utilities, infrastructure and support facilities. An additional 1 million square feet must be added by 2028.

Samsung Foundry, which has been buried in losses for several years, is expected to return to profitability from the fourth quarter of this year. Kiwoon Securities projected the business unit will post 163 billion won ($109 million) in operating profit during the period.

“With big tech companies set to ramp up shipments of customized semiconductors from 2026, Samsung Foundry is expected to achieve meaningful top-line growth from 2027 related chip production surges,” said Kim Rok-ho, an analyst at Hana Securities.

Samsung also projects more than 130 percent on-year growth in 2-nanometer orders this year, driven by high demand for HPC and AI chips.

For the fourth quarter of 2025, revenue from Samsung Foundry's business surged 6.7 percent from the previous quarter to $3.4 billion, according to market tracker TrendForce. In turn, global market share surged to 7.1 percent from 6.8 percent, remaining in second place after TSMC's undisputed 70.4 percent.

BY LEE JAE-LIM [[email protected]]