As revealed by Samsung Electronics recently in its latest document they are going to consider the establishment of 11 chip factories, and the location in Texas, USA. The proposed project will be going to be in execution in the next two decades, and the tentative total investment may be around 200 billion US dollars, also it is predicted that this unit will generate more than 10,000 chips employment opportunities. Though things are not officially revealed yet and we update what we get as rumours, so waiting for official confirmation of the same.
If this could happen and is implemented successfully then it going to be the largest economic investment in the history of Central Texas, so further waiting for Samsung’s official commitment to investing.
To add a limited increase in chip supply
Also as per the report, By 2023, Samsung expects demand-related uncertainties to persist in the market. However, it is also noticeable that the top three DRAMs increase the chip shipment by an average of 15%. This measure is taken of limited increase in supply should slow down the volatility of the memory chip cycle, which should definitely have a significant impact on the dynamics of supply and demand.
Meanwhile, the Korean giant maintains BUY and 12m TP of 75,000 KRW to SEC, and that too continues to have a positive outlook, such as:
- The stock has fallen to an all-time low of 1.1x P / B, which seems excessive even with the shortcomings of 2Q22 and
- A limited increase in the supply of memory chips projected in 2023 should reduce the volatility of the memory chip cycle, preventing the occurrence of the tough scenarios that happened in 4Q18.
The company also revised downwards 2022E NP (attributable to control interest) by 7% to KRW40.8tn to reflect the adverse impact that macro uncertainties are expected to have on the demand for smartphones/computers and DRAM / NAND prices.
Click here for more details: Samsung Electronics: Limited increase in chip supply by 2023 to Impact Dynamics – SamNews 24
It is predicted that this step taken is to enhance its semiconductor position in the United States market, which definitely helps to increase the revenue of the company. The huge investment of about $200 billion over the next 20 years to build 11 new chip manufacturing plants in Texas in a recent filing with the Texas Comptroller’s Office and released on Wednesday.
Also as per Foreign media, one of the possible reasons is the Texas incentive program, which gives a property tax relief over the period of 10 years for large investments, and which going to expire at the end of the year. So probably Samsung intended to build these new factories in order to seek the tax benefits.
It has been in the air that two of Samsung’s factories will be going to locate in Austin, Texas and the remaining nine in Tyler, Texas. And being large in numbers so certainly the majority of the amount could invest in Taylor’s nine new chip factories and the remaining $25 billion in the Austin unit.
Now, as per the report that Samsung spokesperson Michele Glaze said that submitting an incentive application is part of the company’s long-term plan.
“We currently have no specific construction plans, but the Section 313 application to Texas is part of Samsung’s long-term planning process to assess the feasibility of potentially building additional manufacturing plants in the United States,” he said in a statement.