The U.S. Department of Commerce announced on Monday that it will award up to $6.4 billion in grants to South Korea’s Samsung Electronics, aiming to expand the company’s semiconductor manufacturing facilities in Texas. This significant investment is part of a broader effort by the Biden administration to bolster domestic chip production and strengthen the U.S. position in the global semiconductor industry.
Expanding Chip Production in Texas
The funding, provided under the 2022 CHIPS and Science Act, will support the development of two chip production facilities, a research center, and a packaging facility in Taylor, Texas. Additionally, it will enable Samsung to expand its existing semiconductor plant in Austin. Samsung is expected to invest approximately $45 billion in building and expanding its Texas operations through the end of the decade.
“These investments will allow the U.S. 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,” said Gina Raimondo, U.S. Secretary of Commerce.
Strengthening National Security and Competitiveness
The expansion is anticipated to boost chip output for critical sectors such as aerospace, defense, and automotive industries, enhancing national security and global competitiveness. John Cornyn, a senator from Texas, emphasized the importance of this move, stating, “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.”
Samsung’s Commitment to Innovation
Samsung Electronics Co-CEO Kyung Kye Hyun expressed the company’s dedication to meeting growing demand: “To meet the expected surge in demand from U.S. customers for future products like AI chips, our fabs will be equipped for cutting-edge process technologies and help bring security to the U.S. semiconductor supply chain.” The company anticipates beginning production in 2026, with analysts predicting initial production of 4-nanometer chips and eventual expansion to 2-nanometer technology.
Rebuilding U.S. Semiconductor Manufacturing
The United States has seen its share of global semiconductor manufacturing capacity decline from 37% in 1990 to 12% in 2020, according to the Semiconductor Industry Association (SIA). The CHIPS and Science Act aims to reverse this trend by providing incentives for companies to build and expand chip manufacturing facilities within the country.
“We applaud Samsung for investing boldly in U.S.-based manufacturing and salute the U.S. Commerce Department for making significant headway in implementing the CHIPS Act’s manufacturing incentives and R&D programs,” the SIA said in a statement.
Samsung is the third-largest recipient of CHIPS Act funding, following Intel’s $8.5 billion grant and TSMC’s $6.6 billion allocation earlier this year. These investments reflect a collective effort to rebuild the United States’ semiconductor manufacturing capabilities and reduce reliance on overseas suppliers.
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U.S. awards Samsung $6.4 billion in grants to boost Texas chip output
cgtn.com
