Samsung Electronics has delayed deliveries of chipmaking equipment from ASML for its new factory in Texas, as the South Korean tech giant struggles to secure major customers for the $17 billion project.
According to three sources familiar with the matter, the delay affects the Taylor plant, which is central to Samsung’s ambitions of expanding beyond memory chips and into contract chip manufacturing, a market dominated by Taiwan’s TSMC.
In addition to the delay in receiving equipment, Samsung has also held off placing orders with other suppliers for the Taylor factory, which has forced some suppliers to look for alternative clients and return staff who had been stationed on-site back home, according to three other sources.
The delay in equipment deliveries poses a significant challenge to Samsung’s Taylor factory, a cornerstone of chairman Jay Y. Lee’s strategy to compete in the high-stakes chipmaking industry.
While Samsung has long dominated the memory chip market, its foray into contract manufacturing has lagged behind rivals like TSMC and SK Hynix, both of which are expanding production of advanced chips to meet soaring demand for AI applications.
ASML, the world’s largest supplier of chipmaking equipment, had already cut its sales forecast for 2025 due to delays in factory construction and weakening demand outside of AI sectors.
Two sources confirmed that the delays involved ASML’s extreme ultraviolet (EUV) lithography machines, critical for producing high-end chips. One source noted that these machines, which cost around $200 million each, were scheduled for delivery earlier this year but have yet to be shipped.
Samsung announced earlier this year that production at the Taylor plant would start in 2026, a two-year delay from its original 2024 timeline.
While the company remains publicly committed to this new schedule, industry insiders and analysts express concerns about further delays.
“Without new volume clients, even the 2026 timetable looks challenging. We see a possibility of further delays and even a potential asset write-off,” Macquarie analysts stated in a report last month, describing the factory as potentially becoming a “stranded asset.”
Lee Min-hee, an analyst at BNK Investment & Securities, warned that if Samsung fails to place orders for additional equipment by early next year, the delay could extend further due to the long lead times required for production to begin.
Despite this, Samsung maintains that there has been no change in its plans to start production in 2026, with a spokesperson noting that the return of staff from the Taylor site is part of a routine shift rotation.
Despite Samsung’s efforts, the company’s market share in the contract chip manufacturing industry, known as foundries, has dropped by 8 percentage points to 11% in the past five years.
In contrast, TSMC has grown its market share to 61.7% over the same period, according to data from Statista.
Samsung’s struggle to compete with TSMC is seen as stemming from difficulties in mastering the technology needed to attract clients like Apple and Nvidia, who rely on TSMC for their chip production.
ASML’s finance chief, Roger Dassen, also highlighted “very specific competitive issues in the foundry business,” noting that some customers are ramping up chip production at a slower pace and delaying new fabs. Analysts point to Intel’s struggles, as well as Samsung’s, as part of ASML’s weaker outlook for 2025.
In contrast, TSMC remains on track with its U.S. expansion plans, confirming that volume production at its Arizona factory will begin in 2025. The company reported strong commitments from U.S. clients for the new facility.
Samsung’s struggles are not limited to its Texas factory. The company is also facing challenges in South Korea, where it is experiencing low production yields of its most advanced 3-nanometer chips.
According to two sources, Samsung has delayed investments in new foundry lines at its Pyeongtaek facility. Samsung declined to comment on these delays.
Reflecting Samsung’s difficulties, ASML reported that its sales to South Korea dropped by one-third in the third quarter, to €889 million ($965 million).
This decrease highlights Samsung’s slowing capacity expansion, as it grapples with competition in both the foundry and memory chip markets.
In the memory sector, SK Hynix has overtaken Samsung as the dominant supplier of high-bandwidth memory (HBM) chips, which are crucial for powering Nvidia’s AI chipsets.
Christophe Fouquet, ASML’s CEO, commented during a recent conference call, “I think today, without AI, the market would be very sad if you ask me,” noting that a slower-than-expected recovery for mobile devices and PCs will likely extend into next year.
Boluwatife Enome
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