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Thursday, May 23, 2024

Biden Administration Grants Up to $6.4 Billion to Samsung for Chip Production Expansion

The Biden administration has announced plans to provide up to $6.4 billion in grants to Samsung, a leading chipmaker, to support the expansion of its semiconductor production capabilities. This move is part of a broader initiative aimed at bolstering domestic chip manufacturing to address global supply chain vulnerabilities.

The funding will assist Samsung in financing its new chip manufacturing hub in Taylor, Texas, as well as the expansion of an existing facility in nearby Austin. Samsung intends to construct an additional manufacturing plant and upgrade a facility currently under construction in Taylor, significantly increasing its investment in Texas to approximately $45 billion. These efforts align with the administration’s goal of establishing a robust hub for the development and production of cutting-edge semiconductors within the United States.

In addition to manufacturing chips, Samsung plans to establish a research and development facility in Taylor and an advanced factory for packaging semiconductors. This comprehensive approach aims to enhance the entire semiconductor ecosystem, from research and development to production and packaging.

The grants awarded to Samsung are part of the CHIPS Act, bipartisan legislation passed in 2022 to strengthen the domestic semiconductor supply chain. The Commerce Department has been allocated $39 billion to distribute as grants to incentivize chipmakers to expand their manufacturing capacity in the United States.

The initiative seeks to address the decades-long decline in the U.S. share of global chip manufacturing, as currently only about 10 percent of the world’s chips are produced in the United States. By providing funding to companies like Samsung, the administration aims to reverse this trend and establish the United States as a leader in semiconductor production.

Samsung’s grant is the latest in a series of awards aimed at boosting U.S. chip production. Last week, the administration announced grants of up to $6.6 billion to Taiwan Semiconductor Manufacturing Company (TSMC), the leading maker of advanced chips. Additionally, Intel, a prominent Silicon Valley chipmaker, is set to receive up to $8.5 billion in grants.

Both Samsung and TSMC have committed to producing two-nanometer chips using state-of-the-art technology in the United States, further solidifying the country’s position in semiconductor manufacturing.

In addition to expanding its manufacturing capabilities, Samsung’s investment includes the construction of a new advanced packaging facility. Advanced packaging technologies are crucial for improving the performance and efficiency of semiconductors, particularly as companies increasingly use multiple small chips in electronic systems.

Furthermore, Samsung will establish a research and development facility to drive innovation in semiconductor manufacturing processes. This facility will play a vital role in ensuring access to cutting-edge developments in the field and strengthening the country’s technological leadership.

As part of the grant agreement, Samsung will supply chips directly to the Defense Department, supporting critical industries such as aerospace, defense, and automotive. This underscores the importance of domestic chip production for national security purposes.

The Biden administration expects Samsung’s investment to create thousands of manufacturing jobs and contribute to the revitalization of the semiconductor industry in the United States. By supporting companies like Samsung, the administration aims to reduce reliance on foreign chip manufacturers and safeguard the country’s technological capabilities.

David Faber
David Faber
I am a Business Journalist of The National Era
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