Samsung invests $4bn in U.S. chip-making plant renovation

Samsung invests $4bn in U.S. chip-making plant renovation

Summary: In a major investment, Samsung will throw its weight behind a U.S. plant in order to build more chips for smartphones, as the world's largest phone maker seeks to meet growing demand.

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Samsung will invest between $3--4 billion in an Austin, TX.-based plant to renovate a chip-making production line facility in efforts to meet burgeoning demand for its smartphones. 

It adds to a $1.98 billion investment in South Korea earlier this year to build a new chip-making facility, reports Reuters. The Korea-based smartphone maker will invest the money over the next year in a bid to turn the Austin chip-making plant into a more profitable venture. 

To put the $3--4 billion investment into sense, Samsung reported a $4.5 billion profit in its Q2 earnings alone. 

Samsung is spending a lot to reap the rewards later on down the line: in other words, future-proofing itself against the high demand it saw earlier this year during the Galaxy S III launch, where many phone networks delayed their launches because of supply-chain issues.

Samsung remains the world's largest memory chip supplier by revenue as its chips -- despite the company's ongoing legal tussles with Apple -- supplies memory chips to the iPhone and iPad maker. 

To add a garnish of hope to the jobs at the plant, according to one Austin-based news company, a Samsung spokesperson confirmed the company would be "keeping all jobs intact," and "will be doing a massive training of workers."

According to a Dow Jones wire, the investment comes as the largest ever single foreign investment in Texas, bringing Samsung's total figure to $13 billion since the plant became operational in 1996.

Topics: Processors, Apple, Government US, Mobility, Samsung, Smartphones, Tablets

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11 comments
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  • apple will win patent lawsuit

    Samsung should save this money to pay damages to apple.
    agustinofelisberto@...
    • get real

      If only American companies like Apple actually invested in American manufacturing infrastructure. Looks like it's time for the US government to step in and take some of their cash since they don't seem to be doing anything constructive with it other than suing the competition (that makes better products than they do.)
      prototype2118
      • What do you want, a logo on the building?

        Why do you care whether Apple or Samsung writes the check for the $4 billion? Is there some glory we don't know about in owning billions of dollars worth of semiconductor manufacturing equipment? Apple chooses to buy parts; Samsung chooses to own a lot of property, plant, and equipment. It's their deal, why don't you and your government stay out of it? Nobody asked for your asset management advice.
        Robert Hahn
      • sounds like it

        Apple just hordes tons of cash but doesnt do anything with it. Suing the people who make their chips is downright stupid. Samsung is a innovative company and their continued commitment to development despite their lawsuits proves this.
        Jimster480
  • Smart move by Samsung.

    Part of the problem is the US IRS and the perception that Samsung is avoiding taxes here by mfg elsewhere like Apple. I think they can avoid that argument in the future since Android demand will continue. Of course, this Apple "trade dress" junk will fail and there is a likely mistrial due to the complexity of the jury form. Look for an out of court settlement in Samsung's favor.
    droidfromsd
    • My Dear Friends

      There has to be some method by which a foreign corporation can buy a Congressman, and this is it: you build a big plant in his district, hire a bunch of people, and get at least one municipal and one county government sucking on your teat. Now when you have some problem in Washington, you've got a friend.

      Oh yeah: be sure to invite the Congressman (and the Senator! Don't forget the Senator!) out to get his picture in the paper at the groundbreaking. He's "creatin' jobs."

      Plus you can run television ads showing a bunch of Texans riding the mechanical bull you installed in the Samsung lunchroom, right under the portrait of Kwando Phebius Samsung himself.
      Robert Hahn
      • Right....

        Just like Honda, and Toyota, and all the Japanese car makers.

        Right now, it feels like we (the USA) should be treating Apple like a foreign company and Samsung like a US company, based on how much they are investing in the US and creating jobs in the US.

        What I also think is funny is the idea of Samsung making chips in Austin Texas, to ship to Foxconn in China to be made into iPads to be shipped back to the US to be sold by an acned teenager in an Apple store.
        AudeKhatru
        • Teenagers need jobs too

          Why do you think that's "funny"? Why isn't it exactly what you expect? The highly skilled work that pays well -- making semiconductors -- is taking place in Texas. Putting components in boxes and gluing them shut can be done by any biped from the forest. That is low-value-added work that pays poorly. That happens in China. Retail sales is also not an especially high-value operation and can obviously be done by acne-faced teenagers who speak the local language. And so it is.

          When you read that iPads are "made" in China, the guy telling you that is referring to one of the least highly-valued parts of the process... one that requires little skill and so pays quite poorly. If you moved -that- job to Austin, Texas, it would not become a "high-paid manufacturing job" like the politicians would have you believe. It would either be even further automated to the point of having almost no humans in it, or be a big minimum-wage employer.

          No one is going to "restore America to greatness" by importing millions of low-skill minimum-wage jobs that we can then fill with college graduates. We need a better idea than that.
          Robert Hahn
  • They should spend the money on design and build quality first.

    Their plastic fantastic craptastic phones are cheap junk.
    Johnny Vegas
  • I have mixed feelings over this

    While I'm loving the fact that this plant will bring jobs in our country and will hopefully start a trend of companies to do likewise I agree with Johnny Vegas that their phones are cheap plastic junk and I'm leery of how Samsung operates. Robert Hahn brings up the possibility of this move buying a Congressman and Senator - that is a very distinct possibility. Right now however with the state of our economy and given the boost this plant will give the people in Texas as well as the hope that this will begin a trend of tech companies bringing their manufacturing here to the US I do want this to happen despite my reservations.
    athynz
  • Just around the corner...

    I live about two miles from that plant in North Austin. I have no problems with Samsung as a neighbor so far. The plant is huge already and seems bigger each time I drive by.
    AudeKhatru