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Samsung Hits Pause on Texas Chip Factory Plans Amid ASML

Samsung Hits Pause on Texas Chip Factory Plans Amid ASML

The most critical supplier for Samsung Electronics is reported to be holding delivery of chipmaking equipment next year to Samsung’s new plant in Taylor, Texas, because the company lacks customers for the $17 billion fiber project, insiders say. As mentioned earlier, this has not only delayed ASML deliveries but also caused delays on orders from other suppliers, where staff had to be send back home.

Samsung’s $17 Billion Gamble Stalls Chip Gear Delays Hit Texas Factory

The Taylor facility is important to Samsung s chairman Jay Y. Lee’s plan increase the company s involvement in moving beyond memory chips and into contract chip manufacturing that the industry currently controls TSMC. The delay is a challenge to Samsung’s growth agenda since it may slow down the company’s entry into market segment critical for artificial Intelligence.

This aspect puts Samsung in a diminished position compared with competitors such as TSMC and SK Hynix, which are increasing chip manufacturing for the demand for artificial intelligence technology. On the other hand, Samsung’s Taylor project is still looking for its breakthrough in landing the big name customers.

Other stations that have been impacted peg have also claimed that suppliers have now begun sourcing for other clients, further asserting that the vice now has an impact on the chain besides the original customers’ biggest lend. The remaining and most important strategy demonstrates the conservatism of Samsung in setting its recipes in this respect being an excellent example of how Samsung has decided to postpone deliveries in order to prevent overproduction in the absence of clear customer interest.

However, all these drawbacks have not made Samsung change its mind about the Taylor project nor its long-term aims such as increasing its share of the US market for chip manufacturing. However, the delays point to the challenges that the company finds itself in while competing with big industries players.

ASML Cuts 2025 Sales Outlook as Samsung Delays $200M Chip GearEquipment Delay

ASML, the world’s largest supplier of chip manufacturing equipment, cut its 2025 sales outlook on Tuesday amid a slowdown in demand except for AI and postponements of some factory plans. The company did not elaborate which clients are affected, but according to the Reuters the South Korean tech giant has delayed some of its orders of equipment from ASML.

Sources said that the issues are linked to ASML’s high-end EUV lithography equipment planned for Samsung’s new $170 billion site in Taylor, Texas. Speaking to two insiders, the company had planned to deliver these machines early this year, however the delivery has not been made.

A third source argued that Samsung has held back some of the equipment deliverables but could not specify the machinery or an expected new date of delivery. This equipment is essential in the production of modern chips.

EUV lithography machines cost about $200 million each and are used to project light beams on wafers for micro-patterns making. These chips are necessary for the presents and future of smartphones, electronics, and artificial intelligence.

These disruptions may lead to Slowdowns in shipment to Samsung’s Taylor factory that may further impact the company’s strategies to broaden contract chip manufacturing. Samsung’s attempt to maneuver out from memory chips may furthermore get more difficult as modern production is delayed.

The problem is that demand remains lumpy and heavily skewed towards areas such as AI while others look set to plateau in the near term at best.

Samsung's Chip Dreams on Hold EUV Delays and Market Struggles Ahead

There is still limited information pertaining to the number of EUV machines ordered by Samsung from ASML and the conditions of payment or purchase. The case has not received official statements from the companies involved: the chief editor of ASML, the representatives of the Dutch firm’s South Korean subsidiary as well as Samsung representatives declined to comment on the situation reports Reuters As of this article’s writing, it is hard to get information about the situation; the sources that provide such information address the media are limited,’ one source told Reuters, asking not to be named as they are prohibited to speak to the media

Samsung has moved earlier this year production schedules for its US-based Taylor plant from 2024 to 2026. Lee, a senior executive of Samsung, was quoted by Reuters as saying the company is currently experiencing several problems concerning the facility in question, which lead experts and analysts to worry more about further possible delays.

Dealers at Macquarie have said that without new volume clients, it may be stretching things to expect the role out by 2026, pointing to the possibility that there will have to be an asset write-off for the Taylor project. They said the factory may end up as a ‘stranded asset’ should production challenges continue.

Lee Min-hee of BNK Investment & Securities said that if Samsung does not place orders of equipment more by early next year then the production might be vastly delayed because the time taken in chip making is normally long. 

Although it was expect to have finished the construction of the Taylor facility by early next year, there are issues with output. Samsung insists that there are no disruptions that alter the schedule, contributing to the fact that the return of workers is on a rotational basis.

Samsung’s position in contract manufacturing is becoming clearer over the last five years since TSMC share rose to 61.7% while Samsung’s share fell from 19% to 11%. This decline demonstrates the challenges Samsung encounters when trying to win over large clients such a Apple and Nvidia from TSMC.

In South Korea, Samsung is also facing low fabrication output of the new generation chips including the 3-nanometer chips hence its overall production. Also, ASML revealed a large drop of sales in South Korea by pointing to Samsung’s slowdown in its capacity addition and competition from a competitor SK Hynix that has been performing very well in the high band-width memory chip segment.

Achaoui Rachid
Achaoui Rachid
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