SAMSUNG EXPECTED TO BUILD $17B CHIP FACTORY IN TEXAS

Samsung is planning to build a $17 billion semiconductor factory outside of Austin, Texas, amid a global shortage of chips used in phones, cars and other electronic devices.

Texas Gov. Greg Abbott has scheduled a press conference this week to make an economic announcement; he is expected to unveil the Samsung investment at that time, according to a person familiar with the plan who wasn’t authorized to speak about it publicly ahead of the official announcement. News of the Samsung announcement was reported earlier by the South Korean news agency Yonhap.

The chip shortage has emerged as both a business obstacle and a serious national-security concern. Short supplies of semiconductors kicked off by COVID-era shutdowns have hampered production of new vehicles and electronic devices for more than a year. New questions of economic and national security are also at stake, since many U.S. companies are dependent on chips produced overseas, particularly in Taiwan.

“It’s a concentration risk, a geopolitical risk” to be so reliant on Taiwan for much of the world’s chip production, said Nina Turner, an analyst at IDC. She said the current shortages will likely subside but there will be a long-term demand for chips as more and more everyday products rely on them.

Neither Samsung, a South Korean electronics giant, nor Abbott’s office returned requests for comment about the project this week.

Many chipmakers are spreading out their manufacturing operations, now concentrated in Asia, in response to the shortages, which have taken a toll on sectors from automakers to the video game industry.

“It makes sense for the supply chain to be a bit more diversified geographically,” said Angelo Zino, an analyst at CFRA. “You’re clearly seeing some new foundry capacity plans being announced in the U.S. as well as Europe.”