Samsung to Invest $70B in U.S., Challenge TSMC

According to South Korean outlet Hankyung, Samsung is planning to expand its U.S. footprint by building an advanced chip packaging plant valued at up to $7 billion. Samsung Chairman Jay Y. Lee is expected to visit the U.S. soon, participating in ongoing trade negotiations.

Currently, the U.S. lacks any high-end chip packaging plants. Taiwan Semiconductor Manufacturing Company’s (TSMC) major packaging facility under construction is expected to begin operations around 2030. For Samsung, establishing a similar facility before TSMC’s comes online would not only fill a critical domestic capacity gap, but also offer a significant first-mover advantage. Such a move could attract high-performance computing clients like Nvidia and AMD, potentially challenging TSMC’s dominance in this sector.

Moreover, unlike TSMC, Samsung follows a vertically integrated model that combines design, fabrication, and packaging. This “design-to-delivery” approach offers speed and cost benefits, which are particularly important in the fast-evolving AI chip supply chain.

Though Samsung’s foundry business has long lagged behind TSMC, recent developments signal improvement. On Monday, Samsung announced a $16.5 billion deal with Tesla to manufacture AI semiconductors under a contract extending to 2033. Elon Musk praised the deal, emphasizing that “its strategic importance cannot be overstated,” and noted the total value could end up being several times the currently announced figure.

Vey-Sern Ling, Managing Director at Union Bancaire Privee, commented: “Samsung’s foundry division has been running at a loss with low capacity utilization. This deal will greatly help. Securing Tesla as a client may also bring in more business.” With TSMC raising prices amid tight capacity, and Intel continuing to struggle, Samsung is emerging as TSMC’s strongest challenger.

Samsung isn’t the only Korean firm planning massive U.S. investments. According to the report, SK Hynix also intends to build an advanced DRAM plant to produce HBM (High Bandwidth Memory) chips for critical clients like Nvidia. These plans are part of a broader U.S.-Korea trade agreement under which Korean firms invest in the U.S. in exchange for tariff relief.