Samsung To Secure USD Around $7 Billion in Chip Subsidy For Texas Expansion By CIOTechOutlook Team

Samsung To Secure USD Around $7 Billion in Chip Subsidy For Texas Expansion

CIOTechOutlook Team | Tuesday, 09 April 2024, 02:33 IST

The Biden administration wants to announce next week that it would award between $6 billion and $7 billion to South Korea's Samsung to expand its chip manufacturing in Taylor, Texas, as part of its efforts to increase chipmaking in the United States, according to two people familiar with the subject.

The subsidy, to be announced by Commerce Department Secretary Gina Raimondo, will fund the construction of four facilities in Taylor, including a $17 billion chipmaking plant announced by Samsung in 2021, another factory, an advanced packaging facility, and a research and development center, according to one of the sources.

The transaction would also include an investment in an unnamed site, according to the source, and Samsung will more than double its investment in the United States to more than $44 billion.

It would be the third largest program, right behind Taiwan's TSMC, which promised to build a third Arizona factory by 2030 and raise its investment by $25 billion to $65 billion after receiving a $6.6 billion award, according to sources.

The declaration comes on the heels of a slew of significant Chips and Science grants, as the United States aims to grow domestic chip production and divert funds that may have gone toward building operations in China and the area.

The Chips and Science Act was adopted by Congress in 2022 with the goal of increasing domestic semiconductor output through $52.7 billion in manufacturing and research subsidies. Additionally, lawmakers authorized a $75 billion government loan program; but, according to one of the individuals, Samsung has no intentions to take up loans.

The CHIPS Act aims to minimize dependency on China and Taiwan, as the United States' share of global semiconductor manufacturing capacity has declined from 37% in 1990 to 12% in 2020, according to the Semiconductor Industry Association.