Samsung Electronics has taken a significant step toward ramping up its massive semiconductor plant in Taylor (Texas) after receiving a temporary occupancy permit for part of the main building. The permit — known as a Temporary Certificate of Occupancy (TCO) — allows the activation of specific areas before the full completion of the complex and is viewed in the industry as a sign that the project is entering a more “industrial” phase rather than just construction: beginning site preparation for testing, equipment installation, and ultimately, production ramp-up.
According to available information, the temporary authorization covers approximately 88,000 square feet (about 8,175 m²) within the first factory (Fab 1). A municipal source cited in the press emphasized that these certificates are being issued “by zones,” and additional approvals for larger areas are expected, though no specific timeline has been provided. The message is clear: in such a large facility, each partial approval can unblock tasks that would otherwise wait for final approval.
The Real Value of the TCO: Gaining Weeks (or Months) in the “Ramp-Up”
In an advanced chip manufacturing plant, time is a strategic asset. It’s not just about cutting a ribbon: machinery needs to be installed, lines calibrated, processes validated, and test batches run over weeks. Therefore, being able to access parts of the building while others are still under construction can reduce friction and enable multiple phases to progress simultaneously.
Taylor’s plant is no small operation. The project involves a $37 billion investment, and according to publicly available commitments, Samsung aims to complete 6 million square feet of built-up area by the end of this year, with another 1 million square feet planned through 2028. The campus also spans approximately 1,268 acres (around 512.7 hectares), reflecting the scale of the global race to bring advanced manufacturing capacity to U.S. soil.
Furthermore, there are indications that the project is already benefiting from satellite contracts. For example, a South Korean company specializing in semiconductor equipment and services has signed a supply agreement for cleaning equipment with a delivery deadline of October 26. Such components are typically associated with plant preparation phases requiring cleanroom standards for operation.
EUV on the Horizon: The Essential Step Toward 2 nm Nodes
Several industry sources suggest that Samsung plans to begin testing extreme ultraviolet (EUV) lithography equipment in March—a milestone often regarded as decisive for flagship nodes. Simply put, without EUV, it’s very challenging to competitively manufacture advanced chips at 2 nm technology.
This aligns with the industry’s anticipated timeline: an acceleration toward the second half of 2026 as the window to initiate a more serious production ramp. For Samsung, the goal isn’t just to inaugurate a plant but to demonstrate the capability to execute cutting-edge processes with sustained performance and reliability, especially as the global industry faces pressure from the demand for AI-oriented chips.
Tesla, AI Chips, and a Long-Term Commitment Extending to 2033
Samsung’s Taylor plant cannot be considered in isolation from its most prominent client: Tesla. In July 2025, Elon Musk confirmed a supply agreement worth $16.5 billion, valid through late 2033, tied to the manufacturing of next-generation chips for Tesla at the Texas facility. This announcement primarily focused on the AI6 chips, although Musk had noted that the AI5 would be produced by TSMC. Over the months, the strategy has expanded toward a dual-supplier model for different generations and variants, maintaining software compatibility across the board.
The business rationale is clear: diversifying manufacturing sources reduces risks related to capacity constraints, batch performance issues, and dependence on a single supplier in a market where advanced nodes are a global bottleneck. For Samsung Foundry, securing work related to Tesla offers an opportunity to stabilize revenue and bolster credibility in a competitive contract manufacturing industry where technological reputation translates into contracts.
The TSMC Effect and the Battle for New Clients
Samsung’s move comes within a highly competitive context. TSMC remains the sector’s benchmark and has announced substantial investment plans for 2026, driven by demand for AI and high-performance computing chips. This environment of pricing, capacity, and lead times encourages large tech firms to keep multiple supply options open.
Industry speculation also suggests that Samsung aims to expand its U.S. client portfolio beyond Tesla. Names like Google and AMD are frequently mentioned, although, as is typical, official confirmations tend to arrive late or only after contracts are signed.
Meanwhile, Samsung is also managing its internal strategy: after years of financial pressure on its foundry division, the company has indicated expectations of improved performance as demand for advanced nodes matures and AI-related orders increase. In 2025, Samsung reported capital expenditures of approximately 52.7 trillion won, with 47.5 trillion allocated to semiconductors—a clear sign of the investment effort required to compete in the miniaturization race.
What This Means for the End User (And Why It Should Matter)
Although discussions about occupancy certificates or EUV may seem distant from everyday life, the impact is tangible: increased production capacity means more chips available for automotive, data centers, and connected devices. In Tesla’s case, the story extends beyond vehicles: more capable AI chips could enable everything from advanced driver-assistance systems to training infrastructures and humanoid robots aligned with the company’s broader strategy.
If Samsung manages to accelerate Taylor without setbacks, the U.S. would gain another domestic player capable of producing cutting-edge technology—something governments and businesses seek for supply chain resilience. Yet, the core challenge remains unchanged: building a factory is just the beginning; producing reliably, stably, and at scale is vital.
Frequently Asked Questions
What is a “Temporary Certificate of Occupancy (TCO)” and why is it important in a chip fab?
It’s an authorization to use specific parts of a building before completion. In semiconductor factories, it can expedite equipment installation and testing, speeding up the transition to operational status.
Why is EUV lithography so critical for 2 nm chip manufacturing?
Because it enables printing extremely small patterns with fewer steps and higher accuracy—a practical necessity for advanced nodes where complexity and costs escalate rapidly.
What are the implications of Tesla manufacturing AI chips at Samsung’s Texas plant?
It reinforces strategies to integrate custom hardware for AI and reduce dependencies. For Samsung, it offers volume and credibility in a market where large contracts attract additional clients.
When might the Taylor plant start mass production?
Industry timelines suggest ramp-up could occur in the second half of 2026, following initial testing, process validation, and performance tuning phases.
via: Jukan and Korea JoongAng Daily