U.S. Foundry Race Intensifies Among Global Firms

Samsung’s Taylor Facility Faces Sharper Competition as Intel and TSMC Expand Their US Manufacturing Plans While TSMC Eyes Texas, GF Is Backed by Japanese Funds

The movement of global companies seeking to expand their foundry production facilities in the United States is accelerating. While TSMC, the world’s number one, is reviewing a new investment in Texas, the U.S.-based GlobalFoundries (GF) is building a plant in New York with Japanese funds. This is the result of local production demands from U.S. clients combined with the U.S. government’s demands for investment from allied nations. With Samsung Electronics also preparing to operate its Taylor plant in Texas, competition to secure clients in the U.S. is expected to become even fiercer in the future.

According to the industry on Oct. 16, TSMC Chairman C.C. Wei stated during the third-quarter earnings conference call on Oct. 15 that major U.S. clients are requesting an expansion of local semiconductor production capacity, noting, “We have already dispatched a team to Texas and conducted an evaluation.” Although there are differences of opinion on the plant operation method, they are also in discussions with “Terafab,” a semiconductor plant promoted by Tesla CEO Elon Musk. The investment scale and timing have not been determined.

TSMC is already investing a total of $265 billion in Arizona to expand its production facilities. It is establishing a base ranging from the production of semiconductor wafers for AI and high-performance computing (HPC) to advanced packaging and research and development. The second plant is under construction and is planned to begin mass production in the third quarter of next year. U.S. clients are requesting domestic investments, citing reasons such as supply chain diversification. As advanced semiconductor production is concentrated in Taiwan, the objective is to reduce geopolitical risks caused by the U.S.-China conflict and secure a stable production volume.

Amidst this landscape, the methods of investing in semiconductor infrastructure within the U.S. are also diversifying. On Oct. 14 (local tine), U.S. President Donald Trump announced that the U.S. Department of Commerce will inject up to $21 billion from Japan’s investment funds in the U.S. into two semiconductor plants being built in Malta, New York. This marks the first time that 100% Japanese funds are directly injected into U.S. semiconductor manufacturing infrastructure. The first plant is planned to begin construction this year and operate in 2029, and the decision on whether to build the second plant will be determined by the end of 2028.

In exchange for providing the funds, Japan will jointly own the plants with the US and can secure supply opportunities for its domestic semiconductor equipment companies, as well as a procurement base for semiconductors produced by GlobalFoundries (GF). GF reduces its initial investment burden amounting to tens of trillions of won while gaining profits from providing technology and operating the plants for at least 20 years. The U.S. government also plans to secure an additional 4% stake in GF through a separate agreement, increasing its holding to about 7%. In addition to this, Intel is currently building two advanced semiconductor plants in Ohio with the goal of operating them between 2030 and 2031.

As competition for U.S. production bases intensifies, Samsung Electronics’ strategy to secure additional clients for its Taylor plant is also expected to become increasingly important. In the case of GF, it focuses on mature processes, which differ from the main processes of the Taylor plant, but if TSMC expands its production base to Texas, the pressure Samsung Electronics faces in the competition to win orders from U.S. clients could also increase.

Samsung Electronics is fostering the first Taylor plant as a core base for advanced foundry. The first Taylor plant has currently begun test production on some production lines and is preparing for operation within the year. The second Taylor plant is also planned to begin construction at the end of this year with the goal of mass production in 2030.

The strategy for the Samsung Electronics Taylor plant is to expand its client base in the AI and high-performance computing (HPC) sectors, using its supply to Tesla as a stepping stone, and to strengthen its competitiveness in the 2-nanometer process. In July last year, it won an order for artificial intelligence (AI) chips worth 23 trillion won (about $17.28 billion) from Tesla. Moving forward, securing stable mass production and yield, as well as whether additional long-term supply contracts are signed, are expected to become variables in the U.S. foundry market.

The U.S. demands for expanding local semiconductor production could extend beyond the foundry sector into the memory sector. Consequently, there is a possibility that both Samsung Electronics and SK hynix will face pressure surrounding the expansion of production facilities in the U.S. and the schedules for plant completion and operation.