Samsung costs 10 trillion won more to build a semiconductor plant in the U.S

Samsung costs 10 trillion won more to build a semiconductor plant in the U.S: COMPANY / Reporter Paul Lee / 2023-03-17 06:47:25

This article is translated by AI company Flitto and Alhpa Biz neural machine translation technology

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[Alpha Biz=(Chicago) Reporter Paul Lee] Samsung Electronics' cost of building a new semiconductor plant in Taylor, Texas, is expected to exceed more than $8 billion (about 10.552 trillion won) due to soaring foreign exchange rates and rising U.S. material and labor costs. This far exceeds the subsidies promised by the U.S. administration to semiconductor companies investing in its own country, and there is a deepening concern for Samsung Electronics, which is hesitant to apply for toxic clauses related to the payment of subsidies.

The construction cost of the second foundry plant, which Samsung Electronics is building in Taylor, is expected to exceed $25 billion (about 32.975 trillion won), up more than $8 billion from the $17 billion proposed when it announced its plan to build the plant in November 2021. At the time of the first announcement, $17 billion in exchange rate was about 20.18 trillion won, with the plant's total construction cost rising by 13 trillion won in 16 months.

Even if Samsung Electronics applies for subsidies for semiconductor investment to the U.S. Department of Commerce, the upper limit of subsidies is expected to fall short of the excess construction cost.

The amount of direct subsidies announced by the Ministry of Commerce is 5 to 15 percent of the company's total investment investment, which can receive a subsidy of up to $2.55 billion, given that Samsung Electronics initially announced its total investment at $17 billion.