Samsung to set up a $17 billion plant right beside Tesla's gigafactory
Chip scarcity taught us to prepare
Automotive manufacturing facilities are seeing a massive surge across the globe, courtesy of the transition to EVs. Tesla enjoys a headstart with its first gigafactory already having achieved the title of the highest-volume battery plant in the world in 2018. The American carmaker plans to start volume production in its fifth plant in Austin, Texas, as early as 2022. And aiding that facility would be Samsung’s upcoming one right beside.
A report by Korea Joongang Daily revealed that Korean firm Samsung Electronics would be putting up a $17 billion chip plant titled ‘Star Project’ at Taylor, Texas. An anonymous source close to the story mentioned Taylor was finalised due to its “account investment incentives and geographic conditions” over the other five scouted locations.
Representational Image || Tesla Gigafactory
The planned site is said to carry a 51.7 million sq ft footprint, rendering it to be over four times bigger than the Korean firm’s current production facility at Austin. This investment attracts $314 million worth of tax break incentives for the next ten years but also its own set of added expenses. Another source was quoted saying, “If you set up the new facility in a location away from the Austin plant, it could cost Samsung more for the supply of water and electricity and the establishment of other infrastructure.”
However, the same source also recognises the Taylor location as an advantage as being close to the Texas factory as “it can operate the line in a more stable manner”. Tesla’s FSD (Full Self Driving) chips used in all its cars are produced by Samsung at its Austin plant. The upcoming plant at Taylor would accelerate the chip supply aiding the Cybertruck’s production, utilising Tesla’s more powerful Hardware 4.0 computer.
With both plants situated in proximity, both companies will reap profits while having sustained production and supplies. The groundbreaking ceremony for the new Samsung facility is slated for the first quarter of 2022. Operations are said to begin not before 2024.