US Awards $6.4bn To Samsung For Expanded Texas Chip Production

The US government on Monday awarded up to $6.4 billion (£5.1bn) in grants to Samsung Electronics to expand its chip manufacturing facilities in Texas.

US Commerce Department secretary Gina Raimondo said the award would allow Samsung to expand its chip plant near Austin, Texas, and would increase the output of chips for the aerospace, defence and auto industries.

“(These investments) will allow the US 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 Raimondo.

Samsung is expected to invest about $45bn in building and expanding its Texas facilities up to the end of the decade, administraiton officials said, more than doubling its previous investment.

Domestic chip plants

The subsidy is to go toward four facilities in Taylor, Texas, near the capital of Austin, including a $17bn chip plant that Samsung announced in 2021, a second factory, an advanced packaging facility and a research and development centre.

The grant under the US Chips and Science Act follows a $6.6bn award to Taiwan Semiconductor Manufacturing Co. on Monday and is the third-biggest award announced so far.

Intel was awarded $8.5bn last month to expand its US production facilities, while GlobalFoundries in February received a smaller award of $1.5bn to build a new production facility in Malta, New York, as well as the expansion of an existing Malta plant and a Burlington manufacturing site.

TSMC’s plan expands its investment in a site near Phoenix, Arizona, from $40bn to $65bn with plans to build a third factory by 2030 in addition to the two that are already under construction.

Cutting-edge manufacturing

Under that deal TSMC plans to introduce cutting-edge 2nm manufacturing technology to the second and third of the Arizona plants in the coming years.

The Chips Act funding is designed to reduce the US’ reliance on critical chips produced in countries such as Taiwan and mainland China.

The US share of semiconductor manufacturing fell from 37 percent in 1990 to 12 percent in 2020, according to the Semiconductor Industry Association.

The country currently makes no cutting-edge processors, but the Commerce Department has said it is on track to make 20 percent of them by 2030.