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Semiconductors
OpinionComment
Hugh Harsono
Hugh Harsono

Opinion | Samsung’s Texas chip plant can help US get back in global semiconductor game

  • Samsung’s move could have significant implications for US competitiveness as well as the whole global semiconductor supply chain
  • This could set the stage for a revamped American manufacturing presence while showcasing US efforts to harness other emerging technologies

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A worker inspects semiconductor chips at a plant in Ipoh, Malaysia, on October 15. Photo: Reuters
Hugh Harsono
In November, Samsung announced the building of a US$17 billion chip plant in the city of Taylor, Texas. According to Governor Greg Abbott, Samsung’s move marked the “largest foreign direct investment in the state of Texas”. While the factory will change the dynamics in Taylor, it also has significant implications for the global semiconductor supply chain as a whole.
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Semiconductor supply chains factor in a different elements. Production revolves around the three segments of semiconductor design, front-end fabrication and manufacturing, concluding with back-end assembly, testing and packaging (ATP).

Different countries have developed varying strengths in each segment, with the United States traditionally dominating research and design while possessing strong capabilities across all three aspects of the supply chain. However, its lead in semiconductor manufacturing has shifted in recent years, with 75 per cent of the world’s semiconductor manufacturing processes concentrated in East Asia.

Taiwan has a large lead in advanced manufacturing and ATP. South Korea is prominent in manufacturing, and China is among the strongest in ATP.

With the demand for semiconductors being so high because of their wide applications, Samsung’s move to establish its chip plant in Texas potentially shifts favour of global semiconductor manufacturing back to the US. While not slated to reach operational status until 2024, the plant suggests that the US government’s efforts to be more competitive in chip manufacturing through the use of incentives and subsidies are working.

06:01

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China has historically been strong in ATP, but it has also advanced its ability to design and manufacture semiconductors. The Chinese government is investing more than US$150 billion through 2030 to this effect.

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