Science & Technology

US to Award Samsung up to $6.4 Billion in Grants for Chip Plants

The administration of the President of the United States Joe Biden will provide Samsung Electronics Co. with grants worth up to $6.4 billion to increase chip production in Texas.

US to Award Samsung up to $6.4 Billion in Grants for Chip Plants

The mentioned decision by the US leadership is a move within the framework of efforts to bolster the homegrown production of microcircuits. The grants for Samsung became known from the statement of the Commerce Department of the United States. This statement was published on Monday, April 15.

In total, the South Korean manufacturer intends to invest more than $40 billion in the United States. The company is constructing two foundries in the US, which will be used for making 4-nanometer and 2-nanometer chips.

Samsung also intends to implement projects in the United States to build a research center and launch an advanced microcircuit packaging facility in Taylor, Texas. The company will help produce high-bandwidth memory chips in the US, which are critically needed for artificial intelligence apps.

Samsung also intends to invest in the expansion of the existing microcircuits manufacturing plant. This factory is located in Austin, Texas. In a statement, the Commerce Department of the United States noted that the mentioned factory is important for the country’s aerospace, defense, and automotive industries. The city of Taylor is located near Austin.

Grants for the South Korean manufacturer will be provided as part of the Chips and Science Act 2022. Currently, the Joe Biden administration is seeking to develop homegrown chip-making after decades of moving-concerned manufacturing facilities to Asian countries. Also, in the context of these actions, Washington intends to counter the technological potential of Beijing, which is building up its own semiconductor industry.

Samsung’s project is expected to receive an investment tax credit, which, according to media reports, citing United States officials, will cover up to 25% of qualified capital expenditures.

US Commerce Secretary Gina Raimondo, while talking to media representatives, said that grants for the South Korean manufacturer are part of Joe Biden’s plans to return making advanced semiconductors to the US.

The Samsung project in Taylor contributes to the formation of a robust semiconductor ecosystem in Texas. In this case, additional investments worth tens of billions of dollars from Texas Instruments Inc. should also be mentioned.

The media, citing a senior official of the administration of the President of the United States, reported that the new plants in Taylor will be put into operation in 2026 and 2027. It is worth noting that initially, Samsung planned to launch the chip manufacturing process at one of the mentioned new factories in the second half of 2024.

Gina Raimondo says that investments in the making microcircuits sector will contribute to adding at least 17,000 construction jobs and more than 4,500 manufacturing jobs. The employment situation will improve at the local level as supply chains will be tighter to service new facilities. United States officials have said that $40 million will be used to finance and develop the workforce.

Gina Raimondo also says that the expansion of manufacturing in Austin will increase the output of some of the most advanced semiconductor technologies in the world.

Samsung is currently a leading maker of memory chips that store data on computers and smartphones. The company is also expanding the scope of its activities in the foundry sector or the production of chips designed by customers.

Grants from the Joe Biden administration will strengthen Samsung’s competitive advantages over other makers of microcircuits, which have also received financial support from Washington. TSMC will produce 2-nanometer chips at a factory in Arizona. SK Hynix Inc. plans to launch an advanced packaging facility in Indiana.

The Chips and Science Act provides chipmakers with $39 billion in grants and another $75 billion in loans and guarantees.

In the coming months, the US Commerce Department and Samsung will hammer out the final terms. Money will be disbursed as the project hits the main stages of construction and production.

As we have reported earlier, Intel Plans to Spend $100 Billion on Chip Plants.

Serhii Mikhailov

2267 Posts 0 Comments

Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.