Samsung Electronics is on track to receive over US$6 billion in funding from the United States government to expand its operations beyond a project in Texas, sources familiar with the matter revealed. The grant, part of the 2022 Chips and Science Act, signals a significant investment in the chipmaker by the US government as it aims to bolster domestic semiconductor production. The pending announcement, while a preliminary agreement, could still undergo changes before a final decision is made.
Samsung is expected to make substantial additional investments in the US, further solidifying its presence in the country’s semiconductor industry
In addition to the funding, Samsung is expected to make substantial additional investments in the US, further solidifying its presence in the country’s semiconductor industry. The company had previously announced a US$17 billion project in Taylor, Texas, adjacent to its existing plant in Austin. The exact location of the new investment remains undisclosed at this time.
The US government’s move to allocate funds to Samsung aligns with the broader strategy outlined in the Chips Act, which earmarked a total of US$39 billion in direct grants along with additional loans and guarantees to incentivize semiconductor companies to ramp up production within US borders. The Commerce Department has been engaged in negotiations with leading chip manufacturers to drive innovation and meet the growing demand for advanced semiconductor technology.
Notably, the grant to Samsung comes in the wake of a similar award of over US$5 billion to Taiwan Semiconductor Manufacturing Company (TSMC), highlighting the competitive landscape in the semiconductor industry. As Intel, a major US chipmaker, is also in talks for a substantial Chips Act package exceeding US$10 billion, the semiconductor sector is poised for significant growth and investment in the coming weeks.
While Samsung and the Commerce Department declined to comment on the specifics of the funding arrangement, the pending announcement underscores the commitment to strengthening the semiconductor supply chain and boosting domestic chip production. The economic impact of these investments is expected to be substantial, with Samsung’s contributions to the Austin region alone reaching US$26.8 billion in 2023, underscoring the positive ripple effects of such initiatives on local economies. As negotiations and agreements unfold in the semiconductor sector, the focus remains on enhancing technological capabilities, driving innovation, and securing a competitive edge in the global semiconductor market.
