As TSMC revealed accumulated losses of over NT$39.4 billion (approx. US$1.2 billion) from its Arizona operations over the past four years, attention is turning to Samsung Electronics, which is facing growing uncertainty over its under-construction chip plant in Taylor, Texas. Despite nearing completion, the project is reportedly stuck in limbo as the company hesitates to move forward with the next phase.
According to ChosunBiz, Samsung's Taylor fab is now 99.6% complete. At this stage, equipment installation would normally begin. However, industry sources say Samsung has yet to place critical equipment orders, signaling internal indecision over the fab's operational timeline. While the company maintains that the site will begin production in 2026 as planned, sources anticipate that weak market conditions and an unclear demand outlook could result in lower-than-expected revenue, potentially pushing back the plant's activation.
Adding to the pressure are mounting trade and operational costs. Following a US government potential plan to impose tariffs on semiconductor-related imports, Samsung faces a high risk of steep duties on the equipment it will eventually need to bring in. The delayed installation could ultimately translate to higher import costs.
The issue is compounded by a limited pool of skilled workers; visa restrictions have capped the number of Korean engineers Samsung can deploy to the US, forcing the company to rely more heavily on costlier local labor.
One of the biggest cost drivers is advanced lithography equipment. A single EUV machine from ASML costs around US$350 million, and the potential tariff alone could add in extra cost.
During ASML's most recent earnings call, CFO Roger Dassen acknowledged the potential impact of tariffs on margins but said the company is working with partners to share the burden. Downstream players, such as Samsung, are expected to absorb most of the added costs.
Samsung's situation comes as rival TSMC faces similar financial hurdles in its overseas ventures. According to its latest earnings report, TSMC's Arizona fab recorded a loss of NT$14.3 billion (approx. US$440 million) in 2024. Losses were also posted in Japan and Europe, at over NT$4.3 billion and NT$500 million, respectively. By contrast, TSMC's Nanjing fab in China generated nearly NT$26 billion in profit, highlighting the different stages and market dynamics of each site.
DIGITIMES analyst Luke Lin explained that early losses in overseas fabs are typical due to equipment setup, staff training, and testing without revenue. Using TSMC's Nanjing fab as an example, he noted it took three years to become profitable after initial losses of NT$867 million in 2017 and NT$8.22 billion in 2018, finally earning NT$1.29 billion on NT$18.3 billion in revenue in 2019.
Samsung Electronics announced the Taylor fab plan in November 2021, the company's largest ever in the US. Construction began in early 2022. In June 2024, Texas Governor Greg Abbott inaugurated the Samsung Highway—a US$16.6 million infrastructure project—underscoring state-level support for the chip industry. The highway serves as a critical access point to the Taylor plant.
The facility is part of a wider national strategy to bolster domestic semiconductor production. Samsung received a US$6.4 billion federal grant under the Biden administration's CHIPS Act, furthering the goal of increasing the US share of global advanced chip output.
Article edited by Jack Wu
