Input 2021.03.05 06:00 | Revision 2021.03.05 07:02
200 billion won evaporated after 3 weeks of shutdown
2-3 months until restarting… Loss is likely to exceed 1 trillion won
Samsung Electronics “If you don’t cut tax, you can expand it elsewhere”
It is expected that semiconductor production will not be smooth in the next two to three months, as it requires elaborate and detailed management and inspection to re-operate the fab that has been stopped once. In this case, it is predicted that Samsung Electronics’ Austin Fab will suffer more than 1 trillion won. Samsung Electronics, which was planning to expand the Austin fab, recently revealed its intention to the Austin city authorities that additional facility investments could be made in other regions of the United States.
According to the semiconductor industry on the 4th, Samsung Electronics’ Austin fab has been shut down for more than three weeks from the 16th of last month (local time). The power supply has resumed, but due to incomplete power recovery in the Austin area, a circular power outage continues. In addition, water supply is also struggling. As the water pipe freezes, impurities such as rust are mixed with water, making it impossible to use water to clean and cut the wafer, which is the original semiconductor plate.
Samsung Electronics dispatched about 100 employees to the local area to restart the fab last month, but it is known that they have not found a sharp number either. An official from Samsung Electronics said, “We are doing our best to resolve the situation.”
The Austin Fab generated sales of 3.900 trillion won last year. It means that they were making more than 10 billion won on average per day. However, production losses are exploding every day due to the wait for the factory to be restarted. The industry explains that the amount of penalty that has to be paid for not being able to supply goods in time is significant.
Kim Yang-jae, a researcher at KTB Investment & Securities, said, “It will take 2 to 3 months to re-produce semiconductors after facility restoration,” and “assuming normal operation around May, there will be a loss of about 1 trillion won.”
The Austin Fab is Samsung Electronics’ only US factory, and there are factories such as NXP in the Netherlands and Infineon in Germany that make automotive semiconductors in the area. Similar to Samsung Electronics, they are also unable to operate factories. It is predicted that the semiconductor market, which has recently suffered a supply shortage, will become more difficult due to this cold wave.
It is known that Samsung Electronics recently delivered a revised letter of intent to the Austin city authorities that it will build fabs in two Arizona and one New York if tax cuts are not provided. Currently, in accordance with President Joe Biden’s goal of strengthening the semiconductor supply chain, the US has entered competition to secure semiconductor factories in each region, and Samsung Electronics, a leading global semiconductor company, is in line with the federal government’s strategy to attract fabs.
In this situation, it is predicted that if Samsung Electronics, which suffered tremendous damages due to power and water supply disruptions, cannot obtain tax cuts from the city of Austin for fab expansion, additional fabs in the US will be built elsewhere.
American politics with different interests are sending love calls to Samsung Electronics. US Democratic Senator Chuck Schumer, a district in New York State, recently met with senior officials at Samsung Electronics to request the establishment of a fab in the area. Governor Greg Ebot of Texas, where Austin is located, shares news related to Samsung Electronics expansion on his social media (SNS), suggesting that the possibility of collaboration between Texas and Samsung Electronics is greater than in other regions.