US Chip Ambition Setback

US Chip Ambition Setback

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  • Samsung Electronics is reportedly delaying mass production plans at its new $17 billion semiconductor fabrication plant in Taylor, Texas, dealing a potential setback to the Biden administration's semiconductor supply ambitions. According to reports, mass production at the facility is now expected to commence in 2025, as mentioned by Samsung's president, Choi Si-young, at an industry event in San Francisco. This follows a similar decision by rival Taiwan Semiconductor Manufacturing Company (TSMC) to postpone production at its Arizona fab to 2025 due to a shortage of skilled construction workers and machine installation technicians.
  • The delay in production schedules at major semiconductor plants in the US, including both Samsung and TSMC, poses challenges to President Joe Biden's objective of boosting domestic chip production to prevent future supply disruptions. Originally, Samsung had announced plans for the Texas plant to begin production in the second half of 2024 when the investment was revealed in 2021. Environmental permit issues and delays in financial support from the Biden administration have been hurdles for domestic chip projects, causing concerns that these new plants, worth tens of billions, may not come online until after the 2024 US presidential election.

Why it matters

The semiconductor shortage in 2021 had significant financial implications for companies, and the Biden administration's efforts to secure a more robust domestic semiconductor industry face obstacles with these delays and challenges in funding support.

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