Samsung Electronics (005930.KS) has ~$10b to spend on constructing a new semiconductor fab in the US. As of last week, Samsung was considering 5 possible locations, with two outside of Phoenix, one of which is near Goodyear, Arizona, a town of a bit over 86,000 known as the first place Goodyear (GT) planted cotton for use in tire production, and one that has an abandon WWII Air Force field that is looking for development. Samsung has also asked for a zoning variance for land adjacent to its fab in Austin, Texas, and a site right outside the hamlet of Alabama, New York (pop. 1,869) which has been designated as the Western New York Science & Technology Advanced Manufacturing Park, a 1,250 acre site (empty field) that is being promoted by the state and Genesee County.
While much will depend on what tax and land use incentives are offered to Samsung to establish production in any of these locations, the fab is expected to hire a bit under 2,000 employees, which will be a singular boost to the local and regional economies. If we had to guess, unless NYS offers some massive incentives, Texas has the greatest chance given the resources that Samsung has already established in that location, but we wonder if they should consider a bid on the Foxconn (2354.TT) Mega-LCD fab that was to be the ‘8th Wonder of the World’ back in 2018, as the parking lot seem to have plenty of extra room as of last week.
Samsung is expected to be working toward a 3nm process at the new fab, which is expected to begin production in late 2022 or early 2023 (seems very optimistic) and would be the first EUV based fab in the US, competing directly with Taiwan Semiconductor (TSM) who has announced plans for the construction of a $12b plant in Arizona due for production in 2024. As we noted last week, ASML (ASML) is the only provider of EUV lithography tools currently but says it has reduced its lead time from 6 months to a low as 3 months but did not specify if that was for all equipment or for EUV specifically. The only issue that might slow the whole fab process down is the fact that the Vice-Chairman of Samsung is now incarcerated for two and a half years and has decided not to appeal the sentence. While we expect he will serve less, questions remain as to the leadership of the company during his absence and the ability of other management to make such high-value spending decisions.
While much will depend on what tax and land use incentives are offered to Samsung to establish production in any of these locations, the fab is expected to hire a bit under 2,000 employees, which will be a singular boost to the local and regional economies. If we had to guess, unless NYS offers some massive incentives, Texas has the greatest chance given the resources that Samsung has already established in that location, but we wonder if they should consider a bid on the Foxconn (2354.TT) Mega-LCD fab that was to be the ‘8th Wonder of the World’ back in 2018, as the parking lot seem to have plenty of extra room as of last week.
Samsung is expected to be working toward a 3nm process at the new fab, which is expected to begin production in late 2022 or early 2023 (seems very optimistic) and would be the first EUV based fab in the US, competing directly with Taiwan Semiconductor (TSM) who has announced plans for the construction of a $12b plant in Arizona due for production in 2024. As we noted last week, ASML (ASML) is the only provider of EUV lithography tools currently but says it has reduced its lead time from 6 months to a low as 3 months but did not specify if that was for all equipment or for EUV specifically. The only issue that might slow the whole fab process down is the fact that the Vice-Chairman of Samsung is now incarcerated for two and a half years and has decided not to appeal the sentence. While we expect he will serve less, questions remain as to the leadership of the company during his absence and the ability of other management to make such high-value spending decisions.
Goodyear, Arizona – Source: Google Earth
Site adjacent to Samsung Austin Semiconductor - Source: Google Earth
Alabama, NY STAMP Site - Source: Google Earth
Foxconn Mega-Fab Project - Source: Foxconn Aerials
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