The Biden administration has awarded Samsung, one of the world’s largest chipmakers, up to $6.4 billion in grants to support the company’s new chip manufacturing hub in Taylor, Texas, as well as expanding an existing site in nearby Austin. The grants are part of a larger effort to increase domestic production of cutting-edge semiconductors in the United States. The funding will help Samsung build an additional manufacturing plant and upgrade a facility under construction in Taylor, while also investing in research and development facilities and advanced packaging factories. This initiative is funded by the CHIPS Act, which aims to strengthen the domestic supply of semiconductors by providing incentives to chipmakers to construct and expand plants in the United States.
The Samsung grant is the latest in a series of awards made by federal officials to semiconductor manufacturers, following similar grants to Taiwan Semiconductor Manufacturing Company (TSMC) and Intel. Samsung, like TSMC, has committed to producing two-nanometer chips using the most advanced production technology in the United States. Samsung’s investment also includes the construction of an advanced packaging facility and a research and development facility in Texas. The expansion is intended to support the production of chips used in industries critical for national security, such as aerospace, defense, and automotive. The grants are also expected to cover 25 percent of the cost of building and outfitting the Texas factories with production equipment.
The Biden administration views the lack of domestic manufacturing capacity for semiconductors as a major national security risk, especially given the importance of these components in critical industries like defense and technology. The global shortage of semiconductors caused by the pandemic highlighted vulnerabilities in the supply chain and prompted lawmakers to pass the CHIPS Act to bolster domestic production. By investing in creating a state-of-the-art semiconductor ecosystem in Texas, the administration aims to re-establish the United States as a leader in the production of the most advanced semiconductors. The goal is to increase the country’s share of global chip manufacturing from the current 10 percent to roughly 20 percent by the end of the decade.
Samsung’s investment in Texas includes the construction of two new plants that will produce two-nanometer chips, scheduled to open in 2026 and 2027, respectively. The company will also establish research and development facilities and advanced packaging factories in the region. In total, the investment is expected to create more than 4,500 manufacturing jobs and over 17,000 construction jobs. Similar to other grant recipients, Samsung will need to meet specific milestones to receive payments. The company plays a significant role in the semiconductor industry by supplying both memory and logic chips, making it a crucial player in the development and production of cutting-edge technology.
The grants awarded to Samsung and other semiconductor manufacturers signal a concerted effort by the Biden administration to strengthen the domestic supply chain for semiconductors and reduce the country’s dependence on foreign production. By investing in research and development facilities, advanced manufacturing capabilities, and workforce training, the administration aims to establish the United States as a leader in semiconductor production. The importance of securing a stable and robust supply of semiconductors is crucial for national security and economic competitiveness, as these components power a wide range of industries, from consumer electronics to defense systems and artificial intelligence.
Overall, the grants provided to Samsung and other chipmakers underscore the United States’ commitment to reviving domestic semiconductor manufacturing and ensuring the country’s technological leadership in the global market. By incentivizing companies to invest in state-of-the-art facilities and production capabilities in the United States, the administration aims to address vulnerabilities in the semiconductor supply chain and strengthen national security. The grants are part of a broader strategy to increase the country’s share of global chip manufacturing and secure a more resilient and competitive semiconductor industry in the years to come.
