Samsung's Investment in US Taylor Plant to Exceed $50 Billion
According to Korean media reports, AI semiconductors are set to be a key topic at the upcoming Korea-US summit on August 25. South Korea's leading semiconductor companies, including Samsung Electronics and SK Hynix, are finalizing plans to boost their investments in the United States.
Samsung Electronics, after securing substantial orders from major tech giants like Tesla and Apple, is actively considering expanding its local investments. This includes adding roughly 10 trillion won (about $7.2 billion) to its previously announced investment plans, specifically for advanced packaging facilities that were not included in last year's budget.
An industry insider revealed on August 10 that Samsung initially planned to invest $44 billion in its semiconductor fabrication plant (Fab) in Taylor, Texas. However, due to weaker-than-expected performance late last year, the company adjusted its timeline and scaled down its investment to $37 billion. The original plan covered 4nm and 2nm chip manufacturing, cutting-edge packaging plants, and advanced R&D centers. At that time, the packaging facility's $700 million investment was scrapped because of difficulty securing clients.
This changed dramatically after Samsung signed a multi-year AI chip supply contract with Tesla on July 28 worth 23 trillion won ($16.5 billion). Just ten days later, it also landed an order for Apple's image sensors. These landmark deals underscore the urgent need for Samsung to build state-of-the-art packaging plants. To avoid US tariffs, Samsung aims to complete all production stages—from core chip manufacturing to final processing—within the US. Samsung's unique edge is its "one-stop" model, integrating memory, foundry, and packaging services.
Samsung's expanded US investments are expected to grow not only in packaging but also in equipment and materials. As of the end of Q1 this year, construction of the Taylor Fab 1 plant is 91.8% complete and on track for October completion. Samsung plans to finish cleanroom setup by the end of this year and gradually install semiconductor production equipment in 2024. A senior executive from a company providing materials to the Taylor plant noted, "With anticipated local investment increases, discussions on expanding material support are underway."
Beyond Tesla's known order size, potential additional orders could trigger further investments in equipment and materials. Last month, Tesla CEO Elon Musk described the $16.5 billion figure as a "minimum," adding, "Actual production might be several times higher." This hints that Tesla's collaboration with Samsung could expand beyond automotive chips to include AI semiconductors for supercomputers and broader electronic components for vehicles.
Samsung also mentioned in its recent financial report that this year's investment in the Taylor plant will remain within the current capital expenditure (CapEx) plan, but next year's spending is expected to rise. An industry expert estimated that including additional packaging plant investments, Samsung's total investment in the Taylor facility could exceed $50 billion.
Meanwhile, SK Hynix is preparing to start construction on an advanced packaging plant in West Lafayette, Indiana, valued at about $3.87 billion (5.4 trillion won). The company announced plans last year for a factory dedicated to producing high-bandwidth memory (HBM). Mass production of next-generation HBM and other products is targeted for the second half of 2028, with options to accelerate or expand investment by ramping up non-packaging production earlier.
The expanded US semiconductor investments by Samsung and SK Hynix are expected to support discussions at the Korea-US summit in Washington, D.C., two weeks from now. Yoon Sung-hyuk, South Korea's Presidential Secretary for Industrial Policy, recently stated, "Our companies' existing US investment plans will be included in the summit's agenda." He added, "Although plans like Samsung's Taylor Fab were announced during the Biden administration, these projects will now be driven by chip orders from Tesla and largely implemented during the second term of the Trump administration." This strongly indicates that Samsung will officially announce increased investment plans soon.
