US grants Samsung $6.4 billion for Texas chip production

The Biden administration has announced a significant investment of up to $6.4 billion in grants for Samsung to expand chip production in central Texas as part of efforts to strengthen domestic semiconductor manufacturing. This funding, allocated under the 2022 Chips and Science Act, aims to boost chip production for critical sectors like aerospace, defence, and automotive industries, enhancing national security, according to administration officials. The move reflects a strategic push to bring cutting-edge chip manufacturing back to the United States, marking a pivotal development in the semiconductor industry, as White House National Economic Adviser Lael Brainard emphasised.

Samsung’s receipt of these grants positions it as the third largest recipient under the Chips Act program, following Intel and TSMC. The overarching goal of the Chips Act is to decrease reliance on semiconductor manufacturing in China and Taiwan, given the declining US global market share in this sector over the years. Lawmakers have raised concerns about over-dependence on Taiwan-based TSMC, considering geopolitical tensions with China over Taiwan’s status.

The subsidy will support the establishment of two chip production facilities, a research centre, and a packaging facility in Texas, providing critical infrastructure for Samsung’s expansion plans. Commerce Secretary Gina Raimondo confirmed that these investments will facilitate the growth of Samsung’s semiconductor facility in Austin, Texas, aligning with broader ambitions to lead in semiconductor manufacturing, advanced packaging, research and development.

By the end of the decade, Samsung intends to invest approximately $45 billion in building and expanding its Texas facilities, showcasing a significant commitment to bolstering US semiconductor capabilities.