US to Provide $6.5 Billion to Samsung Electronics

The US government on Monday said that it will provide up to $6.4 billion in direct funding to Samsung Electronics to develop a computer chip manufacturing and research cluster in Texas under the CHIPS and Science Act.

The proposed cluster will create new manufacturing capacity and capabilities for essential chips for the automotive, consumer technology, Internet of Things (IoT), aerospace, and other vital industries.

Samsung’s cluster in Texas includes two factories that would make four- and two-nanometer chips. Also, there would be a factory dedicated to research and development, as well as a facility for the packaging that surrounds chip components. The first factory is expected to be operational in 2026, with the second being operational in 2027.

The decision was announced on Monday by the US Commerce Department and is part of a total investment in the cluster that, with private money, is expected to exceed $40 billion. President Biden signed the CHIPS and Science Act into law in 2022 to boost the production of advanced computer chips domestically.

US Commerce Secretary Gina Raimondo said that the proposed project will propel Texas into a state of the art semiconductor ecosystem. “It puts us on track to hit our goal of producing 20% of the world’s leading edge chips in the US by the end of the decade,” Raimondo added.

Samsung Semiconductor CEO Kye Hyun Kyung said that his company was not just expanding production facilities but strengthening the local semiconductor ecosystem and positioning the US as a global semiconductor manufacturing destination.

“To meet the expected surge in demand from the 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,” Kyung said.

Economic Engine

Samsung Semiconductor has been an economic engine in Texas for nearly 30 years and since then, it has invested $18 billion in operating two fabs at its Austin, Texas, campus—making it one of the largest direct foreign investments in US history.

In 2021, Samsung announced expansion into Taylor with a minimum of $17 billion to construct a new semiconductor manufacturing facility. Samsung is expected to invest more than $40 billion in the region in the coming years as one of the largest foreign direct investments for a greenfield project in the US history, transforming the small municipality of Taylor, Texas, into an expansive hub of leading-edge US semiconductor manufacturing.

Kyung further said that they were planning to boost the local economy by creating quality jobs, including 17,000 in construction sector and 4,500 in manufacturing jobs, and drive workforce development program for semiconductor talent.

“Samsung is also committed to using 100% clean energy at our facilities, as well as sustainable water resource management technologies. We will boost water recycling rates in semiconductor manufacturing and purify discharged water,” Kyung added.