US President Joe Biden’s administration plans to announce next week that it is awarding more than US$6 billion to South Korea’s Samsung Electronics Co to expand its chip output in Taylor, Texas, as it seeks to ramp up chipmaking in the US, two people familiar with the matter said.
The subsidy, which is to be unveiled by US Secretary of Commerce Gina Raimondo, would go toward the construction of four facilities in Taylor, including one US$17 billion chipmaking plant that Samsung announced in 2021, another factory, an advanced packaging facility and a research and development center, one of the sources said.
It would also include an investment in another undisclosed location, the source said, adding that Samsung would more than double its US investment to more than US$44 billion as part of the deal.
Photo: Reuters
The US Department of Commerce and Samsung declined to comment on the matter.
One of the sources said it would be the third-largest subsidy of the program, just behind Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), 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 would cap off a string of major CHIPS and Science Act grants in quick succession as the US seeks to expand domestic chip production and lure away capital that might have been used to build plants in China and the region.
The US’ share of global semiconductor manufacturing capacity fell from 37 percent in 1990 to 12 percent in 2020, the Semiconductor Industry Association has said.
The US Congress in 2022 passed the CHIPS 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 does not plan to take any loans.
Biden would not attend the event, the two sources said.
He faces a tough fight to win a second term in November against former US president Donald Trump.
Texas Governor Greg Abbott, a Republican, was invited to attend, one of the sources added.
While TSMC and Intel Corp, which was awarded US$8.5 billion to expand its US chip output last month, are to expand production in the key swing state of Arizona, Samsung’s expansion in reliably Republican Texas is seen as less likely to help Biden during the election.
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