Samsung Electronics and SK Hynix are fast-tracking multibillion-dollar US investment plans after securing major contracts that validate their American manufacturing strategies. The moves come as both companies seek to capitalize on artificial intelligence chip demand while navigating escalating trade tensions.
Samsung’s $16.5 billion Tesla contract, confirmed by Elon Musk in late July, has prompted the company to reconsider a $7 billion packaging facility investment that was shelved last year. The Korean giant originally planned $44 billion for its Texas foundry but scaled back to $37 billion due to lackluster customer demand. Industry sources now suggest Samsung’s total Texas investment could exceed $50 billion.
The Tesla arrangement highlights Samsung’s struggle to compete with Taiwan Semiconductor Manufacturing Co., which dominates contract chipmaking with a 67% market share compared to Samsung’s 8%. Samsung’s foundry business has been loss-making and struggling with under-utilization, making large customer commitments crucial for justifying massive capital expenditures.
SK Hynix, meanwhile, is preparing to break ground on its $3.87 billion Indiana packaging facility, with mass production targeted for late 2028. The company has secured up to $450 million in proposed federal funding under the CHIPS Act.
Both investments reflect Korean chipmakers’ recognition that proximity to customers and favorable government incentives are reshaping global semiconductor supply chains. However, questions remain about whether these massive bets will generate sufficient returns given intense competition and cyclical demand patterns.
