US Plans to Grant Over $6 Billion to Samsung Electronics for Chip Expansion

US Plans to Grant Over $6 Billion to Samsung Electronics for Chip Expansion

Key Points:

  • The U.S. government plans to award Samsung Electronics over $6 billion under the 2022 Chips and Science Act.
  • The grant aims to support Samsung’s chip expansion efforts in the United States; the pending announcement is subject to potential revisions.
  • Intel is also in talks for a significant Chips Act package, while uncertainties remain regarding loans for other companies.
  • Samsung highlights its economic impact on the Austin region, emphasizing significant growth in recent years.

The U.S. government is reportedly preparing to award Samsung Electronics Co. more than $6 billion as part of the 2022 Chips and Science Act, aimed at aiding the chipmaker’s expansion beyond its existing project in Texas. Sources familiar with the matter revealed that this funding is part of several major awards expected to be announced by the Commerce Department in the coming weeks.

The grant for Samsung, South Korea’s leading chipmaker, is anticipated to accompany significant additional investment by the company in the United States. In 2021, Samsung announced a $17 billion project in Taylor, Texas, near its existing plant in Austin. However, the precise location for the additional investment remains undisclosed.

It’s worth noting that the pending announcement represents a preliminary agreement that could undergo revisions, and no final decision has been reached. Both Samsung and the Commerce Department declined to comment on the matter, while the White House did not respond to requests for comment.

The Chips Act, which set aside $39 billion in direct grants and $75 billion in loans and loan guarantees, aims to incentivize top semiconductor companies to manufacture chips on American soil. The Commerce Department has already announced three Chips Act grants for producers of older-generation semiconductors and has reserved about $28 billion for advanced chip projects that will drive the artificial intelligence sector.

Intel Corp., Samsung’s main American competitor alongside Taiwan Semiconductor Manufacturing Co. (TSMC), is reportedly in talks for a Chips Act package exceeding $10 billion in grants and loans. Intel’s incentive deal is expected to be announced next week, with other advanced chipmakers likely to follow suit.

However, whether companies beyond Intel will receive loans or financing guarantees remains unclear. According to sources familiar with the matter, Samsung has indicated a lack of interest in loans. Additionally, a separate issue concerns $3.5 billion in Chips Act grants allocated for military chip production. This funding initially intended for Intel, has complicated negotiations following the Pentagon’s withdrawal from its portion of the funding.

Samsung previously stated that its Taylor site was scheduled to commence mass production this year, but reports suggest a delay until 2025. Despite uncertainties surrounding the production schedule, Samsung has highlighted its economic impact on the Austin region, which saw significant growth.

TechGolly editorial team led by Al Mahmud Al Mamun. He worked as an Editor-in-Chief at a world-leading professional research Magazine. Rasel Hossain and Enamul Kabir are supporting as Managing Editor. Our team is intercorporate with technologists, researchers, and technology writers. We have substantial knowledge and background in Information Technology (IT), Artificial Intelligence (AI), and Embedded Technology.

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