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Samsung delays $44B US chip plant due to customer shortage
04 Jul 2025

Samsung has reportedly delayed the launch of its $44 billion chip manufacturing facility in Taylor, Texas.

The delay is said to be due to difficulties in getting customers for its output, Nikkei Asia reported.

Even if the South Korean tech giant brings in the necessary equipment to produce chips at the new plant, it can't do much with them owing to lack of demand.

Samsung began building the Taylor fab in 2022
Project update

Samsung started building the Taylor fab in 2022 with an initial investment of $17 billion. By 2024, it increased the investment to $44 billion, adding another advanced fab and expanded R&D operations.

The expansion is backed by a $6.6-billion CHIPS Act subsidy, finalized in December last year after several delays and setbacks.

Documents from the company show that as of March 2024, the site was nearly 92% complete.

Local demand for chips isn't particularly strong
Market shift

The delay in opening the Taylor fab is mainly due to lack of demand. It was originally meant to produce chips on a 4nm process node, but this has now been upgraded to 2nm.

A supply chain executive told Nikkei Asia that local demand for chips isn't particularly strong and the process nodes Samsung planned several years ago no longer meet current customer needs.

Setting up the new facility comes with huge costs
Operational hurdles

Despite operating a mature-node fab in Austin, Texas since 1996, Samsung is facing challenges in setting up the new facility.

The company has to build a new supply chain, hire skilled workers and find customers for its output.

The equipping phase of setup comes with huge costs as well.

Extreme Ultraviolet (EUV) Lithography machines are highly complex and require careful setup for achieving a 2nm process node fabrication at the site.

Samsung also struggling with yield
Production challenges

Samsung's chip-making arm is also said to be struggling with yield, leading to the recall of several key personnel from the site.

This has resulted in a limited number of workers at the Samsung plant as it continues refining its advanced process nodes.

Samsung now aims to open the Texas fab by 2026. Notably, the company needs an operational plant in order to receive the CHIPS Act subsidy.