Dallas – Samsung Electronics announced plans Monday to invest $17 billion in a new chip factory in Austin, Texas, and create 2,000 jobs in Texas.
The U.S. investment by the South Korean electronics company is another sign of efforts by Asian tech companies to increase their presence in the American market as competition with Apple and China’s Huawei is intensifying.
Most of the new jobs will be at Samsung’s Austin plant, which makes memory chips used in computer servers and networking equipment. Another 300 jobs are being created at the company’s research facilities. The new memory chips will help it compete against the likes of Intel Corp. and Taiwan Semiconductor Manufacturing Co.
“We strongly believe that America is the natural place for Samsung to locate its U.S. memory hub,” Samsung Electronics’ chief technology officer, Young Sohn, said at a news conference Monday. “We are deeply committed to driving innovation and to helping build the best corporate culture for employees.”
Samsung’s new investment comes as the company looks to branch out beyond its core market of phones and electronics. It invested $10 billion in order to build a factory for lithium ion batteries in Sparks, Nevada, earlier this year. That factory will start producing batteries for electric vehicles this year.
“Samsung is going full force into the edge markets, and it’s going to be investing a lot of money,” said Tom Gentile, a former president of Intel’s enterprise communications and devices group who is now head of strategic technology in Texas for industry consultant Freedonia Group. “They’re going to be big and a force to be reckoned with.”
Austin, the headquarters of tech software maker Intuit Inc., is one of the fastest-growing tech hubs in the U.S. from a workforce standpoint, and it has long been an attractive destination for technology companies because of its ample supply of cheap land, reliable and cheap power and educated work force.
Samsung is one of the world’s biggest makers of memory chips and semiconductors. That business, known as DRAM, will account for three-quarters of its memory chip output.
The new factory in Austin will be less than an hour by plane from Silicon Valley. Some of its current suppliers include Google, Facebook and Twitter.
“This plant reinforces that that these products are important for American innovation,” said Texas Gov. Greg Abbott. “I’m proud of what Texas is doing to nurture and support the great American tech sector. It’s leading the way in the field of data and all of the innovative things that goes along with it.”