Samsung and TSMC are expanding their chip production facilities to other countries, like Japan and the USA, but they want to keep the most cutting-edge chip fabrication technologies in their home countries.
While Samsung and TSMC plan to make 4nm chips in the US, they are keeping 2nm chip production in South Korea and Taiwan, respectively.
Samsung and TSMC are building mega plants to make 2nm chips
According to a new joint report from SCMP (South China Morning Post) and The Korea Times, Samsung will start making 2nm semiconductor chips in South Korea next year. The company has planned a total investment of KRW 500 trillion ($371 billion) by 2047 in a “mega-cluster” semiconductor project near Seoul, South Korea, and this is where the company wants to make 2nm chips. This news was confirmed by the South Korean government last month. This cluster, which includes 13 chip plants and three research facilities, will span across several cities in Gyeonggi province.
Mark Liu, TSMC chairman, said at the company's earnings call that the firm is planning to build chip fabrication plants to make 2nm semiconductor chips in science parks in Hsinchu and Kaohsiung in Taiwan. The company is also working to get government approvals for another chip plant in Taichung.
Samsung's 4nm chip, the Exynos 2400, is used in the Galaxy S24 and the Galaxy S24+, and you can watch it in action in our video below.
Samsung and TSMC are facing issues in building advanced chip plants outside of their home countries
While both Samsung Foundry and TSMC are expanding chip factories in other countries, they have also faced several issues, including talent shortages and subsidies from the local government. The US CHIPS and Science Act has earmarked $53 billion for subsidies for local semiconductor chip manufacturing.
Samsung Foundry has been building a $17 billion chip plant in Texas since 2021, and it was expected to start 4nm chip production, but those plans have been delayed. TSMC has two under-construction chip plants in Arizona, and they were expected to make 4nm chips in 2024 and 3nm chips by 2026. However, even its plans had to be postponed due to talent shortages and issues with subsidies from the government. Local unions have stopped TSMC from getting talent from Taiwan.
Europe, Japan, and India have also revealed plans to offer subsidies to firms who build semiconductor chips in their countries, but Samsung Foundry and TSMC have refrained from making big investments or snubbed those offers altogether. Analysts say that it is due to the higher costs of building chip plants outside of its home country, Taiwan. For example, it costs 40% more to build a plant in the US, according to Eddie Han, Research Director of Taiwan-based Isaiah Research.
