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Biden gives Samsung $6.4 billion in grants to boost Texas chip output
By Reuters
Updated:
11:47 PM EDT, Mon April 15, 2024
Source: Reuters
The Biden administration will award up to $6.4 billion in grants to
South Korea’s Samsung Electronics to expand its chip production in
central Texas as part of a broader effort to boost US chipmaking, the
Department of Commerce said on Monday.
The funding from the 2022 Chips and Science Act will support two chip
production facilities, a research center and a packaging facility, in
Taylor, Texas, the agency said, as previously reported by Reuters.
It will also enable Samsung to expand its Austin, Texas,
semiconductor facility, Commerce Department Secretary Gina Raimondo
added, while boosting chip output for the aerospace, defense and auto
industries and bolstering national security, administration officials
told reporters.
“(These investments) will allow the US to once again lead the world,
not just in semiconductor design, which is where we do now lead, but
also in manufacturing, advanced packaging, and research and
development,” Raimondo said.
Samsung Electronics Co-CEO Kyung Kye Hyun said: “To meet the
expected surge in demand from US customers, for future products like AI
chips, our fabs will be equipped for cutting-edge process technologies
and help bring security to the US semiconductor supply chain.”
Samsung said it expects to begin production in 2026. Analysts have
estimated the company is likely to begin making 4-nanometer chips at
its pilot production line and eventually expand to 2-nanometer chips.
The announcement, which made Samsung the third-largest Chips Act
award recipient, as first reported by Reuters, is the latest move by
the Biden administration to build out the chipmaking industry in the
United States.
The goal is to reduce reliance on China and Taiwan, as the US share of
global semiconductor manufacturing capacity has fallen from 37% in
1990 to 12% in 2020, according to the Semiconductor Industry
Association (SIA).
Lawmakers have warned that US dependence on chips manufactured in
Taiwan by the world’s top contract chip manufacturer, TSMC, is risky
because China claims the self-governed island as its territory and has
reserved the right to use force to retake it.
“By investing in leading-edge semiconductor manufacturing, we are
helping secure this vulnerable supply chain, boosting our national
security and global competitiveness, and creating new jobs for
Texans,” said John Cornyn, a Republican U.S. senator from Texas who
cosponsored the original legislation.
Samsung is expected to invest roughly $45 billion in building and
expanding its Texas facilities through the end of the decade, said
senior administration officials.
“We applaud Samsung for investing boldly in US-based manufacturing
and salute the US Commerce Department for making significant headway in
implementing the CHIPS Act’s manufacturing incentives and R&D
programs,” SIA said in a statement.
Intel won $8.5 billion in grants last month while Taiwan’s TSMC
clinched $6.6 billion in April to build out its American production.
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