[ad_1]
On a 1,200-acre plot in a small town 30 miles north of Austin, Texas, South Korean giant Samsung is spending $17 billion to build a semiconductor manufacturing plant.
Four hours’ drive north, in Sherman, Texas Instruments is still in the early stages of a $30 billion project, the largest new chip investment in Texas.
Not by chance.
As geopolitical tensions between China and Taiwan drive chipmakers to turn to the United States for manufacturing, Texas has emerged as the place to do business, thanks to a combination of lower taxes and new subsidies.
Since the $52 billion CHIPS & Science Act was first introduced in 2020, there have been more than 50 new semiconductor projects in the United States It was announced that they total over $210 billion. More than $61 billion of that is in Texas, and six projects are expected to create more than 8,000 jobs.
“Because we have outlets, because we have access to materials, because of the lower cost of doing business, we’re in the best position to lead this next generation of chip manufacturing,” Texas Republican Gov. Greg Abbott told CNBC in an April interview.
In June, Abbott signed Texas Chip Act in law. It has allocated $1.4 billion to chip companies to manufacture in the Lone Star State and universities willing to build related research and development centers.
Samsung, Texas Instruments, Infineon, GlobalWafers, NXP, X-FAB, Applied materials All Texas operations have ramped up in recent months. apple And Amazon They also design some of their custom chips in Texas.
When it comes to new chip investments, Arizona tops the list with $20 billion in fab production. Intel and a $40 billion signing of Taiwan Semiconductor Manufacturing Co. , the world’s largest advanced chip maker. However, Texas has the largest number of total fabs and comes second in terms of new investment.
CNBC visited Texas for a rare look inside the huge three-chip cleanrooms, and got a glimpse into the manufacturing heart of the plant, where workers wear special suits to protect the delicate chips from skin and dust particles.
Melissa Hebert, Infineon’s senior manager for Austin site projects, shows CNBC’s Katie Tarasoff touring inside Infineon’s chip manufacturing plant in Austin, Texas, on June 14, 2023.
Andrew Evers
We also toured the two largest new projects under construction in the state.
Samsung’s new factory in Taylor is set to come online next year. It will be the site of Samsung’s first advanced chips to be produced in the US, but it isn’t the company’s first foray into the state.
Samsung came to Texas in 1996, creating ground on a large plot of land in Austin that’s now used entirely for a foundry, and making logic chips for outside customers. The company opened a second factory there in 2007.
“Our customers love coming to Texas,” said John Taylor, Samsung Vice President of Turnkey Engineering. “It’s equidistant from either coast and we know that some of the world’s most remarkable fabless companies are already in the United States.”
With the new facility near Austin, Taylor said, they will “increase their ability to get their chips locally and not have to go to areas of the world where they might feel some discomfort.”
Great Texas Instruments in Sherman, a town of 45,000 about 60 miles north of Dallas, is an even bigger investment. It adds to the company’s legacy at Sherman, which dates back to a separate facility in 1966.
“Texas Instruments has come a long way in putting Sherman on the map,” said David Blair, the city’s mayor, adding that the new plant is “a huge investment in our community.”
“Sherman’s entire tax base was about $4 billion,” Blair said.
Texas Instruments was founded in 1930 as Geophysical Service Inc. , and adopted its current name in 1951. Seven years later, an engineer at the company named Jack Kilby filed a patent application for the integrated circuit. This invention opened up the possibility of miniaturizing chips by creating the entire circuit, not just the transistors, out of silicon.
Texas Instruments went on to design products such as the first portable electronic calculator in 1967, and they are still best known for the graphing calculators used in classrooms around the world.
“It’s very much the calculator company for most of the world, but we’re so much more than that,” said Kyle Fleissner, senior vice president of the Technology and Manufacturing Group at Texas Instruments. “If you have an electronic device, you almost certainly have a TI semiconductor chip inside of it. So we have 80,000 products shipped to 100,000 different customers.”
The company’s technology is about “anything you can plug into a wall or have a wire,” Fleisner said.
CNBC interviewed Flessner at Texas Instruments’ RFAB2 in Richardson, Texas, a suburb north of Dallas. The plant became operational in September and marks the company’s second factory in Richardson, where Texas Instruments plans to manufacture 100 million analog chips a day.
water and energy
Texas Instruments’ $17 billion chip project in Sherman, Texas, on June 15, 2023.
Andrew Evers
Fleisner also took us to the construction site in Sherman. He said that among the main attractions there is water and electricity. Local lawmakers have in the past bought water rights to nearby Lake Texoma, which hovers over the Texas-Oklahoma border and is one of the largest reservoirs in the country.
“We have plenty of water, which is a gold coin for cities and economic development right now,” Blair said.
Making chips requires billions of gallons of water each year. Texas Instruments isn’t the only company benefiting from the region.
GlobalWafers, headquartered in Taiwan, is expanding into Sherman, with plans to spend $5 billion on The largest manufacturer of silicon wafers In the United States, for the production of bare discs on which chips are made.
Meanwhile, about quarter of the state It still suffers from drought, which makes businesses vulnerable to a rapidly changing climate.
“We have the Texas Water Board that is working on that and legislation that we are working on in this session to make sure that as the population grows in Texas, we will be able to provide for the water needs of not only businesses, but also our growing population,” Abbott said.
Texas Instruments and Samsung are increasing water reuse goals at their new facilities.
Then there are the power requirements. Each of the advanced ultraviolet (EUV) lithography machines Samsung will use at Taylor is rated to consume about 1 megawatt of electricity, or 10% more than the previous generation.
Texas has a uniquely independent grid that largely cuts it off from borrowing electricity across state lines. In 2021, that network fails during a severe winter storm, and you leave Millions of Texans are without power and it has killed at least 57 people.
“I’ve already signed 12 acts to make the power grid more reliable, resilient, and secure,” Abbott said. “We can certainly guarantee any company that moves here that they will get the strength they need, but also at a low cost.”
samsungAnd Infineon And NXP They were forced to temporarily close Austin Fabs during the February 2021 power outage. Totally upgradable power.
“Big Texas”
Samsung is building a $17 billion chip factory on 1,200 acres in Taylor, Texas, 30 miles north of Austin. The construction site shown here on April 21, 2023.
Kate Brigham
Since the early days of Silicon Valley, the cost of making smaller and smaller transistors has gone up, along with the size of the machines and the land space required for manufacturing. Texas has always been famous for its abundance of land and policies favorable to new business.
“Texas is spacious, it’s huge, and so it has a lot of support for ease of business,” said Jinman Han, president of Samsung’s US chip business. “At the same time, we have great support from our local Texas governments, even from the Texas governor himself.”
Texas is one of them Only a handful of states Without income tax. Combine that with Sales tax exemptions on machinery manufacturing and a variety of other tax breaks, and it is understandable why Caterpillar, Charles SchwabHewlett-Packard and Oracle have moved their headquarters to Texas in recent years.
Germany’s Infineon, one of the world’s largest providers of automotive chips, has been in the US for 25 years and makes several semiconductors in Austin.
“The number of chips in the car, in the electric vehicle, in cars in general is increasing exponentially,” said Melissa Hebert, senior project manager for the Austin site at Infineon. “All communication and everything that communicates in and around the vehicle increases the chip content of each vehicle.”
In 2020, Infineon expanded manufacturing into Texas, buying Cypress Semiconductor for about $10 billion.
“With the support that we’ve received from the state legislature, and then also the federal support in this industry, Texas continues to be a hub where we can build that manufacturing,” Hebert said, before taking us to the Infineon clean room.
NXP Semiconductor, which is headquartered in the Netherlands, owns two Fabien lots in Austin and has recently laid out plans $2.6 billion expansion That would add an additional four-story fab.
X-FAB, a chipset company that has been operating in Texas for more than two decades, recently announced a release $200 million expansion From Silicon Carbide Fab in North Texas.
Suppliers are following.
“When you start bringing in a piece of fab like this, you need to build an ecosystem,” Samsung’s Taylor said. “There’s a lot of discussion these days about in-house supply chains.”
Of the $17 billion price tag for Taylor’s fab Samsung, $11 billion goes to machinery and equipment. Such tools will account for at least 65% of Sherman’s new manufacturing costs, Texas Instruments said, including $200 million in EUV lithography machines made by ASML, which has offices in Dallas and Austin.
Applied Materials, the world’s second largest provider of semiconductor equipment, has been present in Austin since 1992.
The surge in fab development in the US comes as some major chip companies face a slowdown amid economic uncertainty. Intelthe third largest advanced chip maker, aims to cut costs by up to $10 billion over the next three years, which is Sale of the 61-acre Austin Research Center.
Samsung reported dismal first-quarter earnings in April and cut production of memory chips in response to lower prices. But it’s pouring more money into the foundry side of its business, making logic chips in Texas, and has plans to expand into its new facility near Austin.
“We have 1,200 acres, and that first factory occupies about 250 acres of it,” Taylor said. “So we have room to expand.”
Likewise, Texas Instruments is very much on Fab even after it reported earlier this year about First drop in sales since 2020.
“We’re in relatively early stages, but we’re making tremendous progress toward production outside of this facility in 2025,” Fleisner said.
[ad_2]
