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Samsung Gets $6.4 Billion Grant to Ramp Up Chip Production in Texas

In a significant move aimed at fortifying the U.S. semiconductor industry, the Biden administration announced plans to allocate up to $6.4 billion in grants to South Korea’s Samsung Electronics. The funds, part of the 2022 Chips and Science Act, will support the expansion of chip production facilities in central Texas, as unveiled by the Department of Commerce on Monday.

The investment will facilitate the establishment of two chip production facilities, a research centre, and a packaging facility in Taylor, Texas, alongside the expansion of Samsung’s semiconductor facility in Austin. According to Commerce Department Secretary Gina Raimondo, this initiative not only aims to enhance chip output for critical sectors like aerospace, defence, and automotive but also bolsters national security by reducing reliance on foreign chip manufacturers.

Raimondo emphasized that these investments position the U.S. to lead globally in semiconductor manufacturing, advanced packaging, and research and development. Samsung Electronics Co-CEO Kyung Kye Hyun echoed this sentiment, highlighting the company’s commitment to meeting the surging demand for future products like AI chips while enhancing security in the semiconductor supply chain.

Samsung anticipates commencing production in 2026, with plans to produce cutting-edge 4-nanometer chips initially, potentially expanding to 2-nanometer chips in the future. This announcement solidifies Samsung as one of the key beneficiaries of the Chips Act, aligning with the Biden administration’s broader strategy to bolster domestic chipmaking capabilities and reduce dependence on foreign suppliers.

The move comes amidst growing concerns over reliance on chip manufacturing in China and Taiwan, with the U.S. semiconductor manufacturing capacity declining significantly in recent decades. By investing in advanced semiconductor manufacturing, policymakers aim to safeguard the semiconductor supply chain, enhance national security, and spur job creation.

Republican U.S. Senator John Cornyn, a cosponsor of the original legislation, emphasized the importance of investing in semiconductor manufacturing to bolster national security and global competitiveness while creating new job opportunities in Texas.

Samsung’s substantial investment in building and expanding its Texas facilities, totalling approximately $45 billion through the decade’s end, has garnered praise from industry stakeholders. The Semiconductor Industry Association (SIA) commended Samsung’s commitment to U.S.-based manufacturing and applauded the Commerce Department’s progress in implementing the Chips Act’s incentives and research programs.

This grant to Samsung follows previous awards to industry giants like Intel and TSMC, underscoring the Biden administration’s ongoing efforts to revitalize the U.S. semiconductor industry and secure the nation’s technological leadership in the global arena.

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