Exclusive: Samsung secures key operation approval for $37B Taylor factory

Samsung's Taylor plant in Texas, which is scheduled to start mass production within 2026 [TAYLOR CITY]

 
Samsung Electronics received temporary occupancy approval for a significant part of its $37 billion chip plant in Taylor, Texas, paving the way for limited operations ahead of full completion scheduled for the second half of this year.
 
Officials of the Texan city confirmed that the Korean chipmaker has secured temporary certificates of occupancy (TCO) covering about 88,000 square feet at Fab 1, adding that the timeline for acquiring permits for rest of the building areas was not finalized.
 
"The fab building is being issued Temporary Certificates of Occupancy by area," a Taylor city official said. "To date, approximately 88,000 square feet has been TCO'd. Larger areas are anticipated to follow; however, the timing for those spaces has not yet been established."
 

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Still, the approval reflects Samsung's commitment to accelerating the ramp-up of the facility for advanced semiconductors following a $16.5 billion supply deal struck with Tesla in July of last year amid robust demand for chips across the board.
 
Signs of progress continue to emerge: on Thursday, a Korean semiconductor equipment and services provider known as Device said in a regulatory filing that it had secured a 10.9 billion won ($7.4 million) contract with Samsung’s U.S. subsidiary to supply semiconductor cleaning equipment by Oct. 26, with the gear widely expected to be destined for Samsung’s Taylor fab.
 

A view of Samsung Electronics’ Taylor plant under construction in Texas [SAMSUNG ELECTRONICS]

 
Under its agreement with local authorities, Samsung is required to complete 6 million square feet of floorspace by the end of this year, with another 1 million square feet scheduled to be added by 2028. The overall campus spans 1,268 acres.
 
Construction appears to be progressing on schedule. Multiple reports indicate that the plant is set to begin testing its extreme ultraviolet lithography equipment next month — an essential step for producing advanced 2-nanometer chips — ahead of a full production ramp-up in the second half of the year.
 
Once mass production begins, the facility is expected to manufacture Tesla’s AI5 chips under a contract running through 2033, which also covers future AI6 chips.
 
Tesla CEO Elon Musk recently said on X that the design of the AI5 chip is nearly finished and that work on the next-generation AI6 is already underway. He has signaled a goal of a nine-month design cycle for successive chips, with plans extending as far as AI9.
 

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There are also indications that Samsung Foundry is seeking additional U.S. customers beyond Tesla, with Google and AMD frequently mentioned as potential partners. A source familiar with the situation told the Korea JoongAng Daily that recent price increases by rival chipmaker TSMC have made Samsung a more attractive option for U.S. technology firms.
 
This shift is further influenced by Taiwan’s “N-2” policy, which restricts TSMC’s most advanced 2-nanometer production to facilities on the island until at least 2028. As a result, TSMC’s Arizona plant will not be able to produce its cutting-edge chips until roughly four years after they debut in Taiwan, even though TSMC began mass production of its 2-nanometer process in December.
 

A view of Samsung Electronics’ Taylor plant under construction in Texas [SAMSUNG ELECTRONICS]

 
Kang Suk-chae, Samsung Foundry’s executive vice president, said during a recent conference call that the company has been in talks with major U.S. and Chinese clients following the Tesla deal. He added that Samsung aims to secure "more than 130 percent" in 2-nanometer orders this year compared to 2025, driven by demand for high-performance computing and AI applications.
 
Separately, as part of a January trade agreement, Taiwan committed to investing $500 billion over the next decade to relocate portions of its semiconductor supply chain to the United States. Much of this effort is expected to be led by TSMC, which is reportedly considering expanding its Arizona footprint to as many as 11 total plants. TSMC’s capital spending for this year is projected to be between $52 and $56 billion, up as much as 40 percent from 2025.
 
Samsung, meanwhile, allocated 47.5 trillion won of its total 52.7 trillion won in 2025 capital expenditures to its chip business — more than 90 percent of its overall spending — with the company confirming that a portion was directed toward the Taylor facility. The company has not yet announced any further expansion plans for the site.
 
After several years of losses in its foundry division, Samsung expects the business to turn profitable this year as production for Tesla ramps up, targeting double-digit growth in revenue compared with 2025.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]