Samsung announces $1bn investment to expand Texas microchip plant

Posted on 3 Nov 2016 by Aiden Burgess

Samsung is planning to invest more than $1bn in its Austin-based Texas facility by the first half of 2017 in order to expand its manufacturing capabilities.

The significant investment will help the Samsung Austin Semiconductor (SAS) plant to expand its mobile chip manufacturing and enhance its current System LSI business to help meet the growing demands in the industry for advanced system-on-chip (SoC ) products, especially for mobile and other electronic devices.

The layers of a semiconductor - image courtesy of Samsung.
The layers of a semiconductor – image courtesy of Samsung.

Large-scale integration (LSI) is the process of integrating or embedding thousands of transistors on a single silicon semiconductor microchip.

This investment is the latest in a long line of sizable investments Samsung has made at its Austin facility, with the South Korean-based multinational having invested more than $16bn for the expansion and maintenance of the Samsung Austin Semiconductor plant since 1997.

The Austin facility has about 3,000 employees and has a floor size of 2.3 million sq ft or around 300 acres. This makes the Samsung Austin Semiconductor plant one of the largest and most advanced semiconductor manufacturing facilities in the US, producing integrated components for tablets, smart phones and other mobile devices.

Samsung and other chip manufacturers are dedicating more resources to making chips for IoT devices, which it is believed will ship in the billions by 2020.

Samsung makes huge economic impact in Austin

Samsung’s SAS facility has brought enormous economic benefit to the Austin community since its inception in 1997.

According to an Impact Data Source Economic Impact Study, SAS added $3.6bn into the regional economy of central Texas in 2015, as well as supporting 10,755 jobs in the area and $498m in annual salaries.

Samsung opened its SAS facility in 2007 after spending $3.5bn to build the factory.

The $3.5bn investment for the project was, at the time, the largest single foreign investment in Texas history.

In 2012 Samsung announced it would spend another $4bn towards its Austin plant in order to renovate one of its chip production lines and to increase the fabrication of the system chips used in smartphones and tablets.

The $4bn investment in 2012 brought the total investment for the Austin facility to $13.5bn at the time.

Samsung’s latest $1bn investment in it’s SAS facility comes at a time when Samsung has suffered one of its worse quarters in the wake of the recent Galaxy Note7 fires which forced the model to be recalled and subsequently damaged the Samsung brand and reputation.

Samsung discontinued their Galaxy Note7 after the model’s battery-cell problems led to overheating and fires in some of the phones.

President of Austin Chamber of Commerce Mike Rollins said Samsung’s latest investment at the SAS plant would continue to provide fantastic opportunities for the people of Austin.

“Samsung is a bellwether for Austin, as a company that the community and state partnered with to relocate here several years ago, they have far exceeded expectations,” he said.

“Samsung remains a shining example of what happens when we create a business friendly environment. The result is a win that enhances and sustains our community’s ability to create a broad range of new jobs and economic opportunities for Austinites and their families.”

Austin Mayor Steve Adler also praised Samsung’s continued investment in the Texas city.

“I was glad to discuss this with Samsung when our trade delegation visited Korea, and I’m thrilled that this plan is coming to fruition,” he said.

“Samsung is so often a source of good news in Austin whether it’s about jobs, education, workforce development, housing or helping the homeless. Samsung is a great partner for Austin’s present, and this announcement tells us that they’ll be an even bigger part of our future.”