South Korean electronics giant Samsung is the latest chipmaker to receive billions from the U.S. CHIPS and Science Act, the Biden administration said Monday.
Samsung will get up to $6.4 billion in direct funding under the act, which is meant to bring advanced chipmaking stateside. The company plans to claim an investment tax credit from the Treasury Department to cover up to 25% of qualified capital expenditures, the Department of Commerce said. The funding will support the more than $40 billion investment Samsung will make in building a chipmaking hub in Taylor, Texas, and expanding its existing facility in Austin. The electronics giant recently upped its investment into the Texas facilities from $17 billion to $44 billion, The Wall Street Journal reported.
The Texas hub will focus on developing and producing advanced chips, research and development, and advanced packaging. With Samsung’s investment, the U.S. is on track to produce about 20% of the world’s advanced logic chips by the end of the decade, the Commerce Department said.
The semiconductors developed and produced in the Taylor hub, which would include two foundry fabs focused on mass producing 4nm and 2nm process technologies, will be used to advance industries including AI and defense.
“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,” Kye Hyun Kyung, president and CEO of the Device Solutions Division at Samsung, said in a statement. “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 advance the security of the U.S. semiconductor supply chain.”
The U.S. funding and Samsung’s investment will “cement central Texas’s role as a state-of-the-art semiconductor ecosystem,” President Joe Biden said in a statement. He added that the investment will create at least 21,500 jobs, and that up to $40 million of the CHIPS Act funding will go toward training and developing the local workforce.
Samsung, Intel, and Taiwan Semiconductor Manufacturing Company (TSMC), which have all received CHIPS Act funding, are the only three firms in the world capable of producing advanced logic chips used in AI and national security development, the Journal reported.
Meanwhile, fellow South Korean semiconductor company SK Hynix reportedly plans to invest billions in a chipmaking facility in West Lafayette, Ind. The U.S. investments into South Korea’s chipmaking giants come at a time when U.S. officials are reportedly asking South Korea to restrict exports of semiconductor tools to China in an effort to curb Chinese advanced chipmaking.
South Korea is reportedly weighing the request, which would likely have repercussions on Samsung and SK Hynix, both of which operate in China. Officials from the U.S., South Korea, and Japan will reportedly meet in June to discuss advanced chipmaking efforts.