There is a fundamental flaw in America’s semiconductor strategy. They’re building capacity without securing demand. Samsung’s Taylor plant situation reveals how quickly the chip industry moves and how expensive it becomes when you have ambitious plans but meet market reality.
The fact that Samsung’s facility is 91.8% complete but sitting idle represents a massive capital misallocation. Originally planned for 4nm production (then upgraded to 2nm), the plant now finds itself caught between outdated technology and unproven demand. This points out the brutal economics of semiconductor manufacturing, where billion dollar investments can become useless before they even start production.
Samsung’s struggle is quite different as compared to TSMC’s dominance. While TSMC secures customers like Apple and Nvidia before building capacity, Samsung appears to have built first and sought customers later. This approach worked during the global chip shortage when any production capacity was valuable, but today’s market demands more strategic alignment between supply and demand.
The company received $4.7 billion in CHIPS Act subsidies but the new Trump administration is actively working to put an end to these programs. This creates a double challenge. Samsung must justify continued investment without government support while competing against TSMC’s established customer relationships.
Don’t think this dilemma is limited to Samsung. If a major player like Samsung struggles to find customers for advanced US chip production, it raises questions about whether America’s semiconductor reshoring strategy is based on realistic demand projections or political aspirations. The weak demand in smartphones, PCs, and consumer electronics that the plant was designed to serve suggests the market may not need another major foundry competitor right now.
For the US semiconductor ecosystem, Samsung’s delays tell us that successful reshoring requires more than just subsidies and construction. It demands careful coordination between capacity building, technology development, and customer acquisition. This is a lesson that other companies planning US chip facilities should carefully consider.
