US Chipmaking Incentives: Samsung Electronics to Expand Texas Production

TFD – Dive into the details of US chipmaking incentives, with a spotlight on Samsung Electronics’ expansion in Texas. Learn about the impact on semiconductor production and national security.

As part of a larger initiative to increase US chipmaking, the Biden administration will give incentives totaling up to $6.4 billion to Samsung Electronics, a South Korean company, to enable it to increase chip production in central Texas, the Department of Commerce announced on Monday.

According to the government and as previously reported by Reuters, two chip production facilities in Taylor, Texas—a research center and a packaging facility—will be supported by financing from the 2022 Chips and Science Act.

Additionally, according to Commerce Department Secretary Gina Raimondo, it will allow Samsung to grow its semiconductor plant in Austin, Texas. Administration officials told reporters that it will also increase chip output for the aerospace, defense, and auto industries as well as strengthen national security.

“The US will be able to lead the world once again thanks to these investments—not just in semiconductor design, where we currently lead, but also in manufacturing, cutting-edge packaging, and R&D,” stated Raimondo.

Our fabs will be equipped for cutting-edge process technologies to meet the expected surge in demand from US customers for future products like AI chips and help bring security to the US semiconductor supply chain,” stated Kyung Kye Hyun, co-CEO of Samsung Electronics.

According to Samsung, production is scheduled to start in 2026. Experts predict that the business will probably start producing 4-nanometer chips on its pilot production line before moving on to 2-nanometer chips.

The latest action by the Biden administration to expand the chipmaking business in the United States is the news that, as initially reported by Reuters, named Samsung the third-largest recipient of the Chips Act award.

The objective is to lessen dependency on China and Taiwan since, according to the Semiconductor Industry Association (SIA), the US’s share of the world’s semiconductor production capacity has decreased from 37% in 1990 to 12% in 2020.

Lawmakers have cautioned that it would be dangerous for the US to rely solely on chips made in Taiwan by TSMC, the largest contract chip manufacturer in the world, because China still claims the self-governing island as its own territory and has the right to use force to recover it.

John Cornyn, a Republican U.S. senator from Texas who cosponsored the original legislation, stated, “We are helping secure this vulnerable supply chain, boosting our national security and global competitiveness, and creating new jobs for Texans by investing in leading-edge semiconductor manufacturing.

According to senior administration officials, Samsung is projected to invest approximately $45 billion in the construction and expansion of its Texas operations by the end of the decade.

“We salute the US Commerce Department for making significant headway in implementing the manufacturing incentives and R&D programs of the CHIPS Act, and we applaud Samsung for investing boldly in US-based manufacturing,” SIA said in a statement.

Taiwan’s TSMC secured $6.6 billion in April to expand its production in the United States, while Intel received $8.5 billion in funding last month.