The Biden administration is awarding up to $6.4 billion in grants to Samsung Electronics in South Korea to expand its chip production facilities in central Texas. This initiative is part of a broader effort to boost the chipmaking industry in the United States. 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. It will also enable Samsung to expand its semiconductor facility in Austin, Texas, and increase chip output for industries such as aerospace, defense, and automotive.
The announcement by the Department of Commerce is aimed at allowing the United States to once again lead in semiconductor design, manufacturing, advanced packaging, and research and development. The funding will help Samsung meet the expected surge in demand from US customers for future products like AI chips. Samsung Co-CEO Kyung Kye Hyun expressed that the company’s fabs will be equipped for cutting-edge process technologies to enhance security in the US semiconductor supply chain. Production is expected to begin in 2026, with plans to manufacture 4-nanometer chips initially and eventually expand to 2-nanometer chips.
This move by the Biden administration is in line with efforts to reduce reliance on countries like China and Taiwan for semiconductor manufacturing. The US share of global semiconductor manufacturing capacity has significantly decreased over the years, now accounting for only 12% compared to 37% in 1990. Lawmakers have expressed concerns about US dependence on chips manufactured in Taiwan by TSMC, particularly due to tensions between China and Taiwan. The investment in semiconductor manufacturing is seen as a way to strengthen national security, global competitiveness, and create new jobs.
Samsung is expected to invest approximately $45 billion in building and expanding its Texas facilities by the end of the decade. The investment has been praised by industry stakeholders, with the Semiconductor Industry Association commending Samsung for boldly investing in US-based manufacturing. The grant received by Samsung is the third-largest award under the Chips Act, following grants given to Intel and TSMC in previous months. The goal of the grant is to secure the semiconductor supply chain, boost national security, global competitiveness, and job creation in Texas.
The grants provided to Samsung, Intel, and TSMC are part of an effort to build out American chip production capacities and reduce reliance on foreign manufacturers. With the geopolitics surrounding semiconductor manufacturing, the US government is focused on securing the supply chain and ensuring a competitive advantage in this critical industry. The investments in semiconductor manufacturing are seen as vital for economic growth, technological innovation, and national security. The Biden administration’s efforts to support the semiconductor industry through grants and incentives aim to strengthen the US position in this key sector.
