I see a lot of people in this thread who don't really know much about Samsung's semiconductor presence in the USA. This expansion has been in the works for years. Samsung has a 100k wafer per month fab in austin texas. They are negotiating for tax abatements for expansion and using alternative sites as leverage.
They are not building a new fab they are expanding their S2 fab in austin texas. There was a permit application that was released a few years back that shows the true scale of their expansion plans.
If anyone has seen the Austin S2 campus before, you'd know that it has a massive blacktop to provide parking for its thousands of personnel.
It would be nice if as part of the conditions for application approval, Samsung were asked to commit to erect awnings for solar collectors integrated into covered parking and strongly encouraged to invest in making solar more cost effective.
They are trying to strong arm the locals into basically saying they (Samsung) pays zero property taxes to the next 25 years. https://www.statesman.com/story/business/2021/02/04/samsung-... . I hope Austin passes on it if Samsung can't do any better than that.
One of my favorite things to do when I am depressed due to negativity is to read Hacker News comments when Dropbox launched and the NYTimes story on space flight being impossible.
It's kind of odd that Anandtech seems to make a lot of fuss about Samsung's tax break whereas Anandtech's recent article on TSMC's Arizon plant mentions virtually none of the same tax break highlighted for Samsung there. Is Apple still hiring away Anandtech's key editors?
That fab in Texas was the one used to manufacture the early Apple A-series processors. The media and most pundits generally assumed they were made in South Korea, because Samsung.
Foxconn promised a giant fab in exchange for massive tax breaks, and then just took the tax breaks and did nothing. Any reason to expect this is different?
Samsung has a long-term capital and capacity planning process. Isn't it possible (if not likely) that they would pre-order equipment as part of capacity planning without having already decided where it's going to be deployed?
Really happy to see this. It's really frightening how dependent we are on other countries to manufacture our chips. I hope that more American chip companies choose to build fabs here as well, though I recognize how expensive that would be...
Also... is every single tech company investing heavily in Austin? It sure feels like it!
Frankly, I'm surprised that the Austin region's notable decline in quality of life hasn't already begun to act as a feedback mechanism limiting investment and population growth.
Austin was plagued by decades of nimbyism and poor urban planning that prevented sufficient infrastructure development before it was a tech hotspot. ~10 years ago, things like traffic and public transport had already become borderline unbearable relative to comparable cities. It has only become much, much worse in recent years. I imagine that it might still seem livable to tech folks arriving from west/east coast megacities, but to us locals...not so much.
Nearby San Antonio has done a much, much better job in terms of infrastructure development, but of course nobody wants to set up shop there because it doesn't have the (fading, imo) cultural cachet that Austin has.
Can someone smarter than me explain why larger companies (e.g., samsung, amazon) can get 50-100% tax breaks from various governments, and we are all seemingly ok with that? What about mid-size businesses? Should they band together to come up with the same "we'll create X jobs in your town claim"?
Because people/companies with bargaining power can get things more easily.
USA wants chips manufactured in the USA for jobs and probably more importantly for national security. Too many chips made in/near China + Intel going down the toilet.
It is super difficult to actually do that when tax laws are national but corporations are global.
When a corporation is large enough to be able to move around in the world they can start shopping around for the most advantageous place to set up shop.
I'm not sure many people are particularly happy with it, but it's a fundamental problem. If you give different levels of government the ability to tax people, then private corporations are going to have the ability to shop around tax jurisdictions to get the best deal, and atleast some of those jurisdictions are going to include places that are deeply republican and believe it's good to have low tax revenue, and even better to attract businesses.
So what do you do? Create federal laws to control state aid and watch as libertarians/states rights people spontaneously combust.
The reasoning, as I understand it: if we taxed rich people too much, it would discourage other people from wanting to be rich, which is bad for the economy.
If you’re wondering like me why they would bother building in an expensive country with fewer qualified workers:
“To build a leading-edge manufacturing facility, Samsung needs rather huge incentives from authorities. In particular, Samsung is requesting combined tax abatements of $805.5 million over 20 years”
I know SV wasn't in the running, but I can't imagine the Bay Area or California even addressing the permits by 2023... On another note, does anyone know if the supply chain/parts/materials/machinery can be sourced from outside of Chinese suppliers?
I've been meaning to do a deep dive on semiconductor supply chains for a while now. I'd start by aggregating annual reports for the companies named in [1], identify their major categories of capex, gather information about their suppliers, and recurse.
Probably one advantage of the proposed Austin site is that it's only a 10-minute drive from the Austin location of Applied Materials (https://www.appliedmaterials.com/), a really large manufacturer of equipment for fabs.
China cannot fabricate semiconductors exclusively on Chinese machinery. In fact, there is very little viable Chinese-made equipment at state of the art technology. They must source machinery primarily from the US [AMAT, LRCX, KLAC], Japan [TEL, Screen] and Europe [ASML].
I worked at Tesla on the CapEx Team, so not chip fabrication but we definitely bought similar things since it is still industrial automation. We mainly sourced from the country we were building in with an emphasis on vertical integration. We even designed our own chips and have them fabbed in the COO. People seem to act like only China makes things. America still makes things, it's just sometimes they are more expensive when you aren't looking at the project holistically.
For Tesla it was simple. Lower lead times means lower safety stock, better quality and usually US suppliers are willing to push payment terms out. So it was a better deal for Tesla. However, some companies use different metrics for their 'deals' and those companies tend to source from China.
Sheesh. I can't believe all the comments here that say, more or less "It's an expansion of an existing fab".
It's most emphatically NOT that!
Directly from the article:
The plans for the new fab are called Project Silicon Silver (PSS), and it will be located adjacent to S2. It will not use any of the existing buildings of S2, but will be a completely new fab constructed from the ground up. It will have its own operations support, central utility building, industrial waste treatment, air separation plans, storage for inert gases, and other constructions.
The only currently-contemplated interconnections between the new facility and the surrounding existing property may be a pedestrian and/or material bridge or walkway constructed between the existing improvements on the site and the new construction
That couldn't be more clear as far as I'm concerned!!!
Interesting if it is related to the possibility of manufacturing smart phones in Mexico [1].
In that sense if you were to take the output of an Austin based fab to supply a smart phone manufacturing supply chain in Mexico versus China, that would be a significant reduction in the length of a smart phone supply chain.
regarding job: modern fab is pretty much automated.
however, people who run the fab are mostly engineers. TSMC recruit from Taiwan's top University like National Taiwan University. you've to pay these professionals a high salary regardless where the fab is. (each new gen fab is more automated than pervious.) just check out the salary + bonus for TSMC engineers in Taiwan.
The reason is that Samsung already has a huge logistical presence in the city supporting the A2/S2 lines. Adding deliveries & pickups for across the street is much easier than building out a new facility in Arizona and replicating all of that over there.
Additionally, if there is some technical fire in the new PSS fab, it would be expected that employees from the existing fabs could walk across the way and assist. They would probably do something where the existing engineering & manufacturing teams are divided up and shared across the facilities to get everything bootstrapped. Their systems are very strictly standardized, so staff from one factory can very easily support any other in the fleet.
Austin has a long established semiconductor workforce, and there are already multiple fabs there, as well as a lot of semiconductor design. Right now, Freescale/NXP has two fabs, Spansion has a flash fab, and Samsung already has a fab in Austin.
They layed off a lot of their Austin-based Exynos CPU design staff two years ago, save for those working on the AMD/Samsung GPU partnership work - still, will be interesting to see how/if Exynos comes back, know they are aggressively hiring for GPU work.
This is awesome! The US needs domestic chip manufacturing, in order to be able to effectively compete, take business from, and vanquish China on all fronts. This includes AI, automobiles, the cloud, etc. The coming technology arms race is looking to be like a second Cold War, so we need to remember the lessons of the first (like containment) and apply them again.
[+] [-] barbacoa|5 years ago|reply
They are not building a new fab they are expanding their S2 fab in austin texas. There was a permit application that was released a few years back that shows the true scale of their expansion plans.
https://www.swf.usace.army.mil/Portals/47/docs/regulatory/pu...
If this goes through it could made Samsung's S2 fab larger than even TSMC's monster gigafabs.
[+] [-] pwdisswordfish0|5 years ago|reply
It would be nice if as part of the conditions for application approval, Samsung were asked to commit to erect awnings for solar collectors integrated into covered parking and strongly encouraged to invest in making solar more cost effective.
[+] [-] stjohnswarts|5 years ago|reply
[+] [-] cscurmudgeon|5 years ago|reply
I am going to add this submission to that list.
[+] [-] tooltalk|5 years ago|reply
https://www.anandtech.com/show/15803/tsmc-build-5nm-fab-in-a...
[+] [-] simonh|5 years ago|reply
[+] [-] unknown|5 years ago|reply
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[+] [-] baybal2|5 years ago|reply
Impossible.
Leads times on fab hardware are on all time high.
Not to say that construction, and setup itself would be extremely challenging in such timeframe.
And not saying that US has no supply chain locally for modern fabs. Intel famously flies a lot of its consumables from abroad.
Samsung will have similarly to transport its consumables by air if they go with this plan.
[+] [-] sdenton4|5 years ago|reply
Foxconn promised a giant fab in exchange for massive tax breaks, and then just took the tax breaks and did nothing. Any reason to expect this is different?
[+] [-] dmeeker|5 years ago|reply
[+] [-] avs733|5 years ago|reply
Intel's last fab build took 9 years to go from green field to producing wafers (note...faster is possible)
https://www.tomshardware.com/news/intels-long-awaited-fab-42...
Some more realistic notes because I sound a little hyperbolic:
2011 - break ground
2013 - finish basic construction
2014 - stop progress
2017 - start install of tooling
2020 - production
[+] [-] Nokinside|5 years ago|reply
They build it in Arizona where Intel has several fabs and where TSMC is building their medium-sized 25K/month 5nm Megafab.
[+] [-] gautamcgoel|5 years ago|reply
Also... is every single tech company investing heavily in Austin? It sure feels like it!
[+] [-] sithadmin|5 years ago|reply
Austin was plagued by decades of nimbyism and poor urban planning that prevented sufficient infrastructure development before it was a tech hotspot. ~10 years ago, things like traffic and public transport had already become borderline unbearable relative to comparable cities. It has only become much, much worse in recent years. I imagine that it might still seem livable to tech folks arriving from west/east coast megacities, but to us locals...not so much.
Nearby San Antonio has done a much, much better job in terms of infrastructure development, but of course nobody wants to set up shop there because it doesn't have the (fading, imo) cultural cachet that Austin has.
[+] [-] jacquesm|5 years ago|reply
[+] [-] rmac|5 years ago|reply
Whatever happened to taxing the rich?
[+] [-] jonplackett|5 years ago|reply
USA wants chips manufactured in the USA for jobs and probably more importantly for national security. Too many chips made in/near China + Intel going down the toilet.
[+] [-] pelliphant|5 years ago|reply
When a corporation is large enough to be able to move around in the world they can start shopping around for the most advantageous place to set up shop.
[+] [-] eqetnjxad|5 years ago|reply
[+] [-] Traster|5 years ago|reply
So what do you do? Create federal laws to control state aid and watch as libertarians/states rights people spontaneously combust.
[+] [-] minikites|5 years ago|reply
[+] [-] DC1350|5 years ago|reply
“To build a leading-edge manufacturing facility, Samsung needs rather huge incentives from authorities. In particular, Samsung is requesting combined tax abatements of $805.5 million over 20 years”
[+] [-] kansface|5 years ago|reply
[+] [-] quasirandom|5 years ago|reply
[1] https://www2.deloitte.com/content/dam/Deloitte/cn/Documents/...
[+] [-] adrianmonk|5 years ago|reply
[+] [-] totalZero|5 years ago|reply
I don't believe there's a single part of the semiconductor supply chain that is exclusively available from China.
[+] [-] 11thEarlOfMar|5 years ago|reply
[+] [-] RhodoGSA|5 years ago|reply
For Tesla it was simple. Lower lead times means lower safety stock, better quality and usually US suppliers are willing to push payment terms out. So it was a better deal for Tesla. However, some companies use different metrics for their 'deals' and those companies tend to source from China.
[+] [-] cma|5 years ago|reply
[+] [-] PhantomGremlin|5 years ago|reply
It's most emphatically NOT that!
Directly from the article:
The plans for the new fab are called Project Silicon Silver (PSS), and it will be located adjacent to S2. It will not use any of the existing buildings of S2, but will be a completely new fab constructed from the ground up. It will have its own operations support, central utility building, industrial waste treatment, air separation plans, storage for inert gases, and other constructions.
The only currently-contemplated interconnections between the new facility and the surrounding existing property may be a pedestrian and/or material bridge or walkway constructed between the existing improvements on the site and the new construction
That couldn't be more clear as far as I'm concerned!!!
[+] [-] thedudeabides5|5 years ago|reply
Love that the US is bringing critical technology supply chains back onshore.
[+] [-] mchusma|5 years ago|reply
[+] [-] somethoughts|5 years ago|reply
In that sense if you were to take the output of an Austin based fab to supply a smart phone manufacturing supply chain in Mexico versus China, that would be a significant reduction in the length of a smart phone supply chain.
[1] https://www.reuters.com/article/us-mexico-china-factories-ex...
[+] [-] unknown|5 years ago|reply
[deleted]
[+] [-] MangoCoffee|5 years ago|reply
however, people who run the fab are mostly engineers. TSMC recruit from Taiwan's top University like National Taiwan University. you've to pay these professionals a high salary regardless where the fab is. (each new gen fab is more automated than pervious.) just check out the salary + bonus for TSMC engineers in Taiwan.
[+] [-] u678u|5 years ago|reply
[+] [-] bob1029|5 years ago|reply
Additionally, if there is some technical fire in the new PSS fab, it would be expected that employees from the existing fabs could walk across the way and assist. They would probably do something where the existing engineering & manufacturing teams are divided up and shared across the facilities to get everything bootstrapped. Their systems are very strictly standardized, so staff from one factory can very easily support any other in the fleet.
[+] [-] cameldrv|5 years ago|reply
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[+] [-] eutropia|5 years ago|reply
Knowing nothing about Austin's climate, of course, I'm assuming that it's reliably hot and dry?
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