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The U.S. government will give Samsung up to $6.4 billion in direct funding to boost its chip production in Texas, the Commerce Department said on Monday.
In return, the South Korean tech giant will commit $45 billion in investment for its two chip production facilities, one under construction in Taylor and another exiting one in Austin. Samsung will also build an additional advanced packaging plant and a research center.
Samsung becomes the third-largest receipt of funding from the U.S. under the CHIPS and Science Act, which gave the Commerce Department $39 billion to dole out as grants to chipmakers to bolster domestic chip production, especially in cutting-edge chips. Intel was granted $8.5 billion for an investment of $100 billion last month while TSMC was given $6.6 billion for an investment of $65 billion just last week.
In a statement, Samsung said the grant will enable the company to “further expand in Central Texas and create new manufacturing capacity and capabilities for essential chips for the automotive, consumer technology, IoT, aerospace, and other vital industries.”
“We’re not just expanding production facilities; we’re strengthening the local semiconductor ecosystem and positioning the U.S. as a global semiconductor manufacturing destination,” Samsung co-CEO Kyung Kye-hyun said.
“To meet the expected surge in demand from U.S. customers, for future products like AI chips, our fabs will be equipped for cutting-edge process technologies and help bring security to the U.S. semiconductor supply chain,” he added.
Samsung’s Austin chip production facility has operated since 1996 and houses two fabs, or chip production lines, which the company continued to upgrade since then. Its facility in Taylor began construction in 2021 and originally had $17 billion earmarked for it. Samsung is expected to manufacture advanced chips from 4-nanometer (nm) process node to 2nm node in its US facilities.
Meanwhile, the announcement comes as Samsung begins recovering from the downturn in the memory chip market. The company said that it expected operating profit for the first quarter to surge 900%.
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