Email Me: lezama at

Samsung’s $25 Billion Gamble in Texas

Samsung facilities in Texas

South Korea’s Samsung Electronics Co Ltd is making a bold bet with the construction of its chip plant in Taylor, Texas. With a total cost of more than $25 billion, the world’s largest memory chipmaker is investing far more than the initial estimate of $8 billion.

The increased cost is mainly due to inflation, and materials such as steel have become more expensive. Samsung’s plan to make advanced chips for artificial intelligence, 5G, and mobile phones promises to create 2,000 high-tech jobs. The company is hoping to finish the plant by 2024 and be producing chips by 2025.

The investment comes amid a push from the Biden Administration to increase chip production in the United States. The Chips Act aims to provide billions of dollars in grants for these projects, but rising costs could limit the effectiveness of these subsidies. The United States Commerce Department has said it will cover up to 15% of the cost of new plants, and the Labor cost has increased significantly since the $52 billion figure for Chips Act grants was first proposed in 2018.

Samsung’s hefty investment in Texas reflects the importance of chips in the global economy. Chips are essential components in many products, from phones to cars, and the demand for them has been increasing steadily in the past few years. Samsung’s large investment in Texas is a testament to the company’s confidence in the future of chips and their demand.

With its chip plant, Samsung is making a big gamble, but one that could pay off if the demand for chips continues to increase. The company is in a race to finish the plant by 2024, and its success or failure could be a bellwether for other chipmakers looking to invest in the United States.