Speaking of Semis – Samsung Gets Going in Texas
Back a bit over a year ago, Samsung Electronics (005930.KS) announced that they had chosen a site in Taylor, Texas for their new 6 million square foot semiconductor fab that is expected to have a $17b price tag. As shown in Figure 3, the site was essentially open farmland, although Figure 4 shows the current status of the site work. Samsung has just begun to order basic cleanroom equipment from a number of South Korean suppliers, with deliveries scheduled for January of 2023. The equipment is thought to be specialized air conditioning and filtering units that are external to the cleanroom, which can be placed before construction is completed.
The town of Taylor has also approved the addition of 9 new applications from Samsung for additional facilities likely to be built in the future, expanding the tax rebate zone to 1,268 acres, which would allow for additional fabs to be built on the site without additional tax abatement approval. The town has also approved a $271m application from Linde (LIN), which will provide co-located industrial gases used at the plant. Samsung has been offering an internship program to the town’s independent school system, donated $1m to 4 local non-profits, and is sponsoring job fairs to residents. The plant is expected to need ~2,000 workers once it begins full-scale operation, and while we expect senior management will come from Samsung in Korea and from Samsung’s other fabs in Texas, the job picture for the region seems positive, especially as suppliers commit to local facilities.
The ground-breaking ceremony, which was expected earlier this year, has still not taken place, site work has continued and foundations are being laid, with the initial production scheduled to begin in the 2nd half of 2024, although we expect things are a bit behind schedule. That said, these early equipment orders bode well for clean room construction to begin early next year, and signal that Samsung is fully behind the project and the timeline is progressing although there is still considerable equipment that has yet to be ordered, which leads us to expect a few months might be added to the production date.
The town of Taylor has also approved the addition of 9 new applications from Samsung for additional facilities likely to be built in the future, expanding the tax rebate zone to 1,268 acres, which would allow for additional fabs to be built on the site without additional tax abatement approval. The town has also approved a $271m application from Linde (LIN), which will provide co-located industrial gases used at the plant. Samsung has been offering an internship program to the town’s independent school system, donated $1m to 4 local non-profits, and is sponsoring job fairs to residents. The plant is expected to need ~2,000 workers once it begins full-scale operation, and while we expect senior management will come from Samsung in Korea and from Samsung’s other fabs in Texas, the job picture for the region seems positive, especially as suppliers commit to local facilities.
The ground-breaking ceremony, which was expected earlier this year, has still not taken place, site work has continued and foundations are being laid, with the initial production scheduled to begin in the 2nd half of 2024, although we expect things are a bit behind schedule. That said, these early equipment orders bode well for clean room construction to begin early next year, and signal that Samsung is fully behind the project and the timeline is progressing although there is still considerable equipment that has yet to be ordered, which leads us to expect a few months might be added to the production date.
Original Samsung Site - Taylor, Texas - Source: LoopNet
Current Site Progress - Source: Samsung Electr\onics
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