Tesla supplier Samsung is building a $17B chip factory 40 mins away from Giga TX

Credit: Tesla

Tesla key supplier Samsung Electronics has reportedly selected Taylor, TX, as the site of its upcoming $17 billion chip plant. The company is reportedly set to meet with the city’s authorities on Wednesday to discuss the new facility’s construction details. 

The update was posted at the Korea Joongang Daily, which cited a source who wished to remain anonymous. “So far, (Samsung Electronics) has thoroughly reviewed four to five locations for the ‘Star Project.’ What I learn is that (Samsung) finally chose Taylor after taking into account investment incentives and geographic conditions,” the source noted. 

Samsung’s upcoming $17 billion chip plant is remarkable. Planned to be built in a 51.7 million square feet location, the Taylor facility would be over four times the size of the company’s Austin facility, which was affected by the state’s power issues earlier this year. Interestingly enough, the proposed Taylor, TX site is also just about 40 minutes away from Gigafactory Texas, which would likely require a substantial number of chips when it hits its stride in vehicle production. 

Samsung is already one of Tesla’s key suppliers. The chips used in Tesla’s FSD computer are produced at Samsung’s Austin site. And considering that work is underway to develop the second iteration of Tesla’s FSD computer, Samsung’s Taylor, TX facility would likely be very busy supplying chips for vehicles like the Cybertruck, which was already announced to feature Tesla’s upcoming Hardware 4.0 computer. 

The upcoming Samsung plant in Taylor is expected to enjoy a number of benefits. The Taylor Independent School District office has tentatively approved tax breaks worth $314 million for the facility for the next ten years. Documents filed with the Texas Comptroller Office also reveal that Samsung is planning to hold the facility’s groundbreaking ceremony by Q1 2022, with a target of starting operations by Q4 2024.

Interestingly enough, Samsung was reportedly looking into establishing its $17 billion plant in the Manor Independent School District, which was close to its existing Austin, TX chip facility. These plans, however, changed when the Austin plant was forced to close in February due to the state’s power issues, which resulted in losses worth about $350 million. This experience, according to an industry insider, discouraged Samsung from building a Manor facility. 

“If you set up the new facility in a location away from the Austin plant, it could cost Samsung more for the supply of water and electricity and the establishment of other infrastructure. But the advantage is that it can operate the line in a more stable manner,” the insider said. 

*Quotes courtesy of Korea Joongang Daily

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Tesla supplier Samsung is building a $17B chip factory 40 mins away from Giga TX
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