Samsung Faces Delays in Texas Chip Plant Amid Lack of Customers
Samsung Electronics has postponed deliveries of advanced chipmaking equipment from ASML for its $17 billion factory in Taylor, Texas, citing the absence of major customers for the project. This delay involves ASML’s high-tech EUV lithography machines, critical for producing advanced chips used in AI servers and smartphones. The move has also led some suppliers to halt orders and reassign staff, further complicating Samsung’s efforts to compete with industry leader TSMC, which dominates the contract chip manufacturing market. Production at the Texas plant, initially planned for 2024, has already been pushed to 2026, raising concerns among analysts about the potential for further delays and financial write-offs.
Challenges Mount for Samsung’s Foundry Ambitions
Despite Samsung’s ambition to rival TSMC in contract chip manufacturing, its market share has fallen significantly over the past five years, while TSMC continues to surge. The company is also grappling with low yields at its South Korean facilities and has delayed additional investments in new chip lines. Samsung’s challenges come when AI drives massive demand for high-end chips, and competitors like SK Hynix and TSMC are capitalizing on this growth. Samsung, however, remains committed to starting production at its Taylor factory by 2026 despite its current hurdles.
My Take
Samsung’s delays signal deeper issues securing a foothold in the foundry business. With AI leading the future of chip demand, Samsung’s lag behind rivals like TSMC and SK Hynix could further widen unless it resolves its customer and production challenges swiftly.
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Credit: Reuters