Samsung Electronics is on alert to build an The Taylor fab due to a surge in U.S. construction costs

Reporter Kim Jisun / approved : 2024-03-08 03:39:57
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[Alpha Biz=(Chicago) Reporter Kim Jisun] Samsung Electronics' semiconductor plant (fab), which is being built by Samsung Electronics in Taylor, the U.S., has soared due to inflation, and Samsung Electronics' planned investment costs are on the verge of being exhausted by construction.

According to the industry on the 8th, Samsung Electronics invested 4.7 billion dollars in the construction of Taylor Fab last year and about 6.27 trillion won in Korean money. It is the first time that specific construction costs have been confirmed. Samsung spent more than KRW 6 trillion last year alone on the construction of pure fab facilities such as labor and material costs.

Taylor Fab started construction in the first half of 2022 and has been under construction for about a year and a half so far. Considering this period, Samsung's construction costs so far are estimated to have exceeded USD 7 billion and KRW 10 trillion.

The problem is that as construction costs increase, they are pressuring Samsung to the extent that they have to change their original investment plan.

Samsung said it would invest a total of $ 17 billion (about 22 trillion won) at the time of the Taylor Fab decision. The investment was set at $ 17 billion from the first half of 2022 to the end of 2024.

However, 40% of the total investment budget ($ 7 billion out of $ 17 billion) has already been spent on construction, and there is another year left before completion.

Based on $4.7 billion, Samsung estimates that a total of $11.7 billion and 70% of the total investment budget will be spent on construction for two years and six months.

The figure is net construction costs, excluding labor and material costs. It's a minimum construction cost. If the related additional costs are calculated, up to 80% of Samsung's initial investment can be withdrawn from the construction cost.

The fundamental background of this burden is US inflation.

Samsung's Taylor Fab is a foundry fab that commissions system semiconductors, and it is expected that a considerable amount of money will be spent on building facilities because it requires advanced processes such as implementing ultrafine circuits to produce system semiconductors.

 

Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)

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