US to award Samsung Electronics US$6 billion chip subsidy for Texas expansion, sources say
- The subsidy will go toward construction of four facilities in Taylor, including one US$17 billion chip-making plant that Samsung announced in 2021
- The announcement will cap off a string of major Chips and Science Act grants in quick succession, as the US seeks to expand domestic semiconductor production
The Biden administration plans to announce that it is awarding more than US$6 billion to South Korea’s Samsung Electronics next week to expand its semiconductor output in Taylor, Texas, as it seeks to ramp up chip-making in the United States, two people familiar with the matter said.
The subsidy, which will be unveiled by US Commerce Department Secretary Gina Raimondo, will go toward construction of four facilities in Taylor, including one US$17 billion chip-making plant that Samsung announced in 2021, another factory, an advanced packaging facility and a research and development centre, one of the sources said.
It will also include an investment in another undisclosed location, the source said, adding that Samsung will more than double its capital outlay in the US to more than US$44 billion as part of the deal.
The Commerce Department and Samsung declined to comment. Texas Governor Greg Abbott’s office did not respond to requests for comment.
US, TSMC strike US$11 billion deal to build ‘most advanced semiconductor chips’
One of the sources said it would be the third largest of the programme, just behind Taiwan Semiconductor Manufacturing Co (TSMC), which was awarded US$6.6 billion on Monday and agreed to expand its investment by US$25 billion to US$65 billion and to add a third Arizona factory by 2030.
The announcement will cap off a string of major Chips and Science Act grants in quick succession, as the US seeks to expand domestic semiconductor production and lure away capital that might have been used to build plants in China and the region.
The US Congress in 2022 approved the Chips and Science Act to boost domestic semiconductor output with US$52.7 billion in research and manufacturing subsidies. Lawmakers also approved US$75 billion in government loan authority, but one of the sources said Samsung plans to take no loans.
US President Joe Biden will not attend the event, the two people said. He faces a tough fight to win a second term in November against former President and Republican rival Donald Trump. Greg Abbott, the Republican governor of Texas was invited to attend, one of the people added.
While both TSMC and Intel, which was awarded US$8.5 billion to expand its US chip output last month, will expand production in the key swing state of Arizona, Samsung’ expansion in reliably Republican Texas is seen as less likely to help Biden at the polls.
