Samsung to build $17bn semiconductor factory in Texas

Samsung has said it will build a $17bn (?12.7bn) semiconductor factory in Texas, amid a global shortage of chips used in cars, phones and other electronic devices.

Samsung had also considered sites in Arizona and New York for the factory, which will be much bigger than its only other US chip plant, also in Austin.

Samsung said the new facility would boost production of hi-tech chips used for 5G mobile communications, advanced computing and artificial intelligence, and also improve supply chain resilience.

The chip shortage has become a significant business obstacle and a serious US national security concern. Shutdowns during the Covid-19 pandemic have led to supply issues, hampering production of new vehicles and electronic devices for more than a year. National security has also become an issue because many US companies are dependent on chips produced overseas, particularly in Taiwan, which China has long claimed as its own territory.

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

The Biden administration has been pushing for Congress to pass the $52bn Chips Act to increase computer chip manufacturing and research. Separate legislation also under consideration would create a tax credit for investment in semiconductor manufacturing facilities.

Other countries have made similar pushes to get chips made closer to where they are used. The European Commission earlier in November said it could approve aid to fund production of semiconductors in the 27-nation bloc.