Samsung Delays US Chip Plant: Customer Shortage

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Samsung Delays Texas Semiconductor Factory Amid Customer Uncertainty

Taylor, Texas – In a setback for the U.S. semiconductor industry, Samsung Electronics is delaying the completion of its advanced semiconductor manufacturing facility in Taylor, Texas. This decision arises from difficulties in securing customers for the plant’s projected output, according to industry insiders.

The South Korean tech giant had previously committed to investing over $37 billion in Texas, supported by a potential $4.7 billion grant from the Biden management under the CHIPS and Science Act. This act aims to bolster U.S. leadership in technology and semiconductor production.

Construction Slowdown at Taylor Fab

The Taylor, Texas facility, originally slated to begin producing cutting-edge chips in 2024, has already seen its timeline pushed back to 2026. Now, further delays loom as Samsung grapples with a lack of immediate demand.

“The completion process is delayed because there are no customers lined up,” a source familiar with the situation revealed. “Samsung is not in a position to proceed with equipment installation at this time.”

Another chip supply chain executive confirmed that Samsung, which already operates a semiconductor plant in Austin, Texas, is in no rush to equip the new facility.

“Local demand for chips isn’t particularly strong, and the process nodes Samsung planned several years ago no longer meet with current customer needs,” The executive stated. He added that overhauling the plant for diffrent chip designs woudl be costly, leading to a cautious “wait-and-see” approach.

Adapting to Customer Needs

Initially, Samsung planned to produce 4-nanometer chipsets but later adjusted to include more advanced 2-nm technology to align with evolving customer demands. Documents from samsung C&T, the construction affiliate, indicate that the facility was 91.8% complete as of March. The initial completion target of April 2024 was revised to the end of October this year, according to filings.

Even though Samsung maintains its commitment to opening the fab in 2026,four years after construction commenced,they declined to provide further details on equipment installation or address concerns about finding customers.

Competitive Landscape and Global Challenges

this delay occurs as Samsung struggles to close the gap with Taiwan Semiconductor manufacturing Co. (TSMC), which dominates the contract chipmaking market with a 67.6% global revenue share in the first quarter, compared to Samsung’s 7.7%, according to trendforce data.

Samsung’s predicament highlights the difficulties faced by chipmakers expanding globally. TSMC, as a notable example, experienced construction delays and labor shortages when building its Arizona plant. However, in late 2024, TSMC’s Arizona plant commenced mass production and secured major AI chipmaking clients like Nvidia, AMD, Amazon and Google. TSMC has pledged over $100 billion to expand its advanced chipmaking and packaging capabilities in Arizona.

The delay in Texas unfolds amid global economic uncertainties. While demand for cutting-edge AI chips rises, demand for chips in smartphones, computers, and cars remains sluggish. Moreover, China’s drive to localize semiconductor production, spurred by U.S. tensions, hinders global market recovery. The rise of Chinese chipmakers is pushing companies like United Microelectronics Corp. to seek new avenues for growth.

Did You Know? The CHIPS Act aims to incentivize domestic semiconductor production by offering substantial grants and tax benefits.

Yield Issues and Market Dynamics

Analysts suggest that Samsung’s contract chipmaking division is grappling with yield, a crucial metric for chip production quality.

Trendforce analyst Joanne Chiao noted that “Samsung Foundry faced unstable yields and order losses.Although yields have since improved, U.S. restrictions on high-end chip production for China have further weighed on the company, keeping its capacity utilization below the industry average.”

She added that securing U.S. customers is a priority, and subsidies and tax credits could help the plant generate output. Though, critically important scaling depends on successful customer acquisition.

Samsung reports improvements in its 2-nm process yields and is pursuing orders for sub-5-nm technology, particularly the 2-nm and 4-nm nodes used in AI and high-performance computing.

Pro Tip: Monitoring industry yield rates can provide insights into the efficiency and competitiveness of semiconductor manufacturers.

Semiconductor Manufacturing: Key Players Comparison

Company	Market Share (Q1 2025)	Key technologies	U.S. Investments
TSMC	67.6%	Advanced Chipmaking, AI Chips	$100+ Billion (Arizona)
Samsung	7.7%	2-nm, 4-nm Nodes, High-Performance Computing	$37 Billion (Texas)
United Microelectronics Corp.	N/A	Seeking New growth Drivers	N/A

What impact do you think this delay will have on the global chip market? How can Samsung overcome its challenges in securing customers for its Texas plant?

Understanding Semiconductor Manufacturing

Semiconductor manufacturing is a complex process involving the creation of integrated circuits on silicon wafers. These circuits are the building blocks of modern electronics. The process involves multiple steps, including wafer fabrication, circuit design, photolithography, etching, and testing.

The efficiency of semiconductor manufacturing is often measured by yield, which represents the percentage of usable chips produced from a single wafer. High yield rates are crucial for profitability and competitiveness in the industry.

Frequently Asked Questions About Semiconductor Manufacturing