Samsung Electronics and Taiwan Semiconductor Manufacturing Company (TSMC) are advancing their chip manufacturing capabilities across the globe, including regions such as Japan and the United States. Despite these international efforts, both companies are reserving their most advanced chip-making processes for their native territories.
As the tech giants intend to produce 4nm chips in the US, they have both made clear that the manufacture of state-of-the-art 2nm chips is to be kept within the borders of South Korea and Taiwan, respectively.
Investments for 2nm Chip Manufacturing Plants in Home Countries
A recent report indicates that Samsung is slated to commence the production of 2nm semiconductor chips in South Korea as early as next year. The company is part of a considerable KRW 500 trillion (about $371 billion) investment in a significant semiconductor project. This construction will occur near Seoul, South Korea, with the projection of housing 13 chip plants and three research facilities over an expansive area in several cities of Gyeonggi province, as confirmed by the South Korean government.
Conversely, Mark Liu, the chairman of TSMC, has revealed plans for new facilities intended for 2nm chip production located in science parks in Hsinchu and Kaohsiung in Taiwan. The company is also seeking approval for additional construction in Taichung.
With advanced chip technology becoming an increasingly critical component in modern devices, there is significant consumer interest in seeing these technologies in action. For example, Samsung’s 4nm chip, the Exynos 2400, is employed in devices such as the Galaxy S24 and Galaxy S24+, whose performance can be observed through various online platforms and demonstrations.
Challenges in Expanding Advanced Chip Production Abroad
Despite expansion efforts abroad, Samsung Foundry and TSMC have encountered obstacles, including a lack of skilled workers and limited subsidies from local governments. The US, through the CHIPS and Science Act, has set aside $53 billion to support the domestic production of semiconductor chips.
For Samsung Foundry, a notable project is the $17 billion chip plant in Texas, initiated in 2021. This facility was expected to begin production of 4nm chips, yet has faced delays. TSMC has similarly experienced setbacks with their Arizona-based plants which are projected to produce 4nm chips in 2024, with a proposal for 3nm chips by 2026 having to be deferred. Challenges include insufficient local labor force and complexities associated with government subsidies which have restricted TSMC from employing talent from Taiwan.
Other countries, including those in Europe, Japan, and India, have also proposed attractive subsidies to entice companies that manufacture semiconductor chips within their borders. Nonetheless, Samsung Foundry and TSMC have been cautious with significant investments or have declined such incentives to some degree. Analysts suggest the hesitance is due to the elevated costs of setting up chip plants abroad, emphasizing that creating a facility in the US, for instance, can be up to 40% more expensive compared to constructing one in Taiwan.
