WASHINGTON - The Biden administration will award up to US$6.4 billion (S$8.7 billion) in grants to South Korea’s Samsung to expand its chip production in central Texas as part of a broader effort to boost US chipmaking, the Department of Commerce said on April 15.
The funding from the 2022 Chips and Science Act will support two chip-production facilities, a research centre and a packaging facility in Taylor, Texas, the agency said, as previously reported by Reuters.
Commerce Secretary Gina Raimondo said it will also enable Samsung to expand its semiconductor facility in Austin, Texas, while boosting chip output for the aerospace, defence and auto industries and bolstering national security.
“(These investments) will allow the US to once again lead the world, not just in semiconductor design, which is where we do now lead, but also in manufacturing, advanced packaging and research and development,” Ms Raimondo said.
Samsung Electronics co-chief executive Kyung Kye Hyun said: “To meet the expected surge in demand from US customers, for future products like artificial intelligence chips, our fabs will be equipped for cutting-edge process technologies and help bring security to the US semiconductor supply chain.”
Samsung said it expects to begin production in 2026.
Analysts say Samsung is likely to begin making 4-nanometre (nm) chips at its pilot production line, and eventually expand to 2nm chips.
The announcement, which made Samsung the third-largest Chips Act award recipient, is the latest move by the Biden administration to build out the chipmaking industry in the US.
The goal is to reduce reliance on China and Taiwan. According to the US’ Semiconductor Industry Association (SIA), the country’s share of global semiconductor manufacturing capacity has fallen from 37 per cent in 1990 to 12 per cent in 2020.
Lawmakers have warned that US dependence on chips made in Taiwan by the world’s top contract chip manufacturer – Taiwan Semiconductor Manufacturing Co (TSMC) – is risky because China claims the self-governed island as its territory and has reserved the right to use force to retake it.
“By investing in leading-edge semiconductor manufacturing, we are helping secure this vulnerable supply chain, boosting our national security and global competitiveness, and creating new jobs for Texans,” said Mr John Cornyn, a Republican senator from Texas who co-sponsored the original legislation.
Samsung is expected to invest roughly US$45 billion in building and expanding its Texas facilities through the end of the decade, said senior administration officials.
SIA said in a statement: “We applaud Samsung for investing boldly in US-based manufacturing and salute the US Commerce Department for making significant headway in implementing the Chips Act’s manufacturing incentives and research and development programmes.”
Intel won US$8.5 billion in grants in March, while TSMC clinched US$6.6 billion in April to build out its American production. REUTERS
