Samsung said to delay Texas chip plant to 2026

Samsung’s semiconductor plant in Taylor, Texas, originally scheduled to open in 2024, has been delayed until 2026.

The facility is over 90% complete but faces postponement due to a lack of customers and required upgrades to its manufacturing capabilities.

The plant is part of Samsung’s US$44 billion investment in Texas.

The company is modifying it to produce 2-nanometer chips instead of 4-nanometer chips to boost competitiveness against rivals like TSMC.

However, challenges remain, including securing volume clients.

🔗 Source: Engadget

🧠 Food for thought

1️⃣ The semiconductor industry’s rapid pendulum swing from shortage to surplus

Samsung’s delay reflects a dramatic industry shift from extreme scarcity to potential oversupply in just three years.

During the pandemic-driven chip shortage (2020-2022), semiconductor lead times stretched to 22.2 weeks by April 2021, the longest since 2017, with demand surging 13% as remote work and learning increased electronics consumption 1.

By 2023, the industry had largely recovered from shortages, with companies now confronting potential overcapacity as manufacturers that rushed to expand during the crisis now face weaker demand 2.

This pattern mirrors Intel’s recent decision to delay its $28 billion Ohio facility, with Intel’s Foundry Manufacturing General Manager citing the need to “synchronize manufacturing capacity with market demand” 2.

The situation demonstrates the semiconductor industry’s persistent cyclical nature, similar to the 1990s when aggressive capacity expansion led to significant oversupply and market corrections, particularly affecting memory manufacturers 3.

2️⃣ The intensifying TSMC-Samsung competitive battle shapes investment decisions

Samsung’s pivot from 4nm to 2nm chip manufacturing capability in Texas reflects its strategic response to TSMC’s market dominance rather than just adapting to customer needs.

Despite being the world’s second-largest foundry, Samsung holds just 13% market share compared to TSMC’s commanding 62% as of Q1 2024, and has lost major clients like Apple and Nvidia to its rival due to efficiency issues 4.