Samsung postpones $37 billion Texas chip plant citing lack of clients

Samsung postpones its $37B Texas chip plant until 2026 due to client shortages.

: Samsung's ambitious plan to launch a $37 billion chip plant in Taylor, Texas, has been delayed until 2026 due to a lack of clients for its foundry services. Initially set to open in 2024, 91.8% of its construction was completed by March, yet no chip manufacturing equipment has been installed. Samsung faces issues with outdated process nodes and struggles to justify short-term investments given weak local demand and 2nm process challenges. Despite U.S. government subsidies, including $4.7 billion under the CHIPS act, competition with industry leader TSMC remains difficult.

Samsung’s decision to delay the opening of its $37 billion chip manufacturing plant in Texas comes amidst challenges in the semiconductor industry. Originally intended to commence operations in 2024, the completion date has now shifted to 2026 due to a lack of customers for the foundry's services. In a statement, Samsung admitted that local demand in the United States has not lived up to expectations, and the nodes intended for production at the Taylor facility are outdated. According to a report by TechSpot, the project was nearly 92 percent complete as of March 2025, but Samsung has yet to install the necessary chip manufacturing equipment, as such equipment would currently remain idle.

A supply chain industry insider suggests that Samsung does not feel any urgency to complete the plant, as there is little demand for the advanced chip production capabilities envisioned for the facility. For the plant to move forward successfully, Samsung would need to revamp the site's capabilities to handle more advanced chip-making processes, which would be a costly endeavor without a clear short-term return on investment. TrendForce analyst Joanne Chiao suggests that while Samsung's 2nm yields have shown improvement, persistent internal and external challenges impede the company's efforts to expand in the U.S.

Current global market dynamics in the semiconductor industry also complicate Samsung's position. TSMC, a major competitor, remains a leader in producing advanced chips, including GPUs and AI accelerators. Their dominance is fueled by strong demand from data centers and technology firms worldwide—a demand that Samsung has thus far struggled to capitalize on. Samsung’s Taylor facility aims to produce chips for several sectors, such as smartphones, PCs, and consumer electronics, yet weakened demand in these areas further delays operation start dates.

Given the substantial public investment into Samsung’s Texas venture, including $4.7 billion earmarked through the CHIPS and Science Act led by the Biden administration, the future of the project remains a topic of political and industrial interest. However, with the new Trump administration aggressively reviewing these semiconductor support programs, uncertainty hangs over the Taylor plant’s financial footing. Significantly, Samsung has encountered challenges with its 2nm process, adding further skepticism about the practicality of its U.S. expansion goals.

As noted, Samsung announced intentions to transition from manufacturing 4nm to a more superior 2nm process node at this facility. This change, however, introduced additional delays and complications. Despite government incentives designed to strengthen the U.S. chip-making industry, Samsung's high hopes for their Texas foundry may be deferred. In particular, local demand and production capabilities have fallen short of expectations, requiring significant recalibrations on Samsung’s part before any broad operational announcements.

Sources: TechSpot, Asia Nikkei, TrendForce