When Trump first announced that there would be a 100% tariff on imported semiconductors, we were shocked. This would represent a massive increase in costs for companies. However, there was a “loophole”, companies that build in the US or commit a plan to build in the US would be exempt. This could explain why Samsung is making huge chip investments in the US.
Samsung grows its chip investments in the US
According to Korean publication Sedaily, Samsung is reportedly planning to ramp up its chip investments in the US. The company recently announced a pledge of $45 billion to build more fabrication plants stateside. However, assuming the new report is accurate, Samsung could increase that further.
The report claims that Samsung spent $37 billion in the US last year. However, it is now planning investments that could bring it up to $50 billion. The company wants to build a new 2nm production and a dedicated advanced packaging facility. This would allow the company to better compete against TSMC, which is making huge stateside investments of its own.
If that is true, Samsung could soon become a much larger player in the semiconductor market. In fact, Samsung might have already set itself up for potential success. It has managed to land deals with Tesla and Apple. The company will help Tesla design its next-gen AI6 chips.
While Apple still relies on TSMC for its A-series chips, Samsung will help Apple build more image sensors stateside. Samsung has also reportedly landed job orders from Qualcomm. The company is rumored to help Qualcomm produce its next flagship chipset, the Snapdragon 8 Elite 2. However, it won’t be producing it alone. TSMC is also reportedly taking part.
Samsung versus TSMC
TSMC has become the default semiconductor manufacturer for the majority of companies around the world. The company’s advanced processes have helped them land gigs from brands like Apple, Qualcomm, and NVIDIA, just to name a few. TSMC has typically eclipsed Samsung in terms of yield, which is why many companies opt to go with them.
However, if Samsung’s US investments pan out, it could prove more competitive. This is especially so in this political climate, where more companies are looking for US-based production to avoid Trump’s tariffs.
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