The US government has recently approved a substantial $6.4 billion subsidy for Samsung to establish advanced computer chip manufacturing facilities in Texas.
This move comes as part of the 2022 CHIPS Act, aimed at incentivizing both US and foreign companies to invest in chip manufacturing within the United States.
Biden Administration Strengthens US Chipmaking with Latest Samsung Texas Plant Subsidy Boost
The Washington Post tells us that the funding agreement entails a noteworthy $40 billion investment by Samsung, encompassing the upgrade of an existing chip factory in Taylor, Tex., as well as the construction of a new facility by the end of the decade.
Additionally, Samsung plans to establish a new research and development center alongside an advanced packaging facility, crucial for assembling various chips and electronic components destined for applications across industries.
Commerce Secretary Gina Raimondo underscored the importance of diversifying chip manufacturing beyond Asia, citing the vulnerability of the US supply chain to disruptions. Raimondo stated, "The whole chain, R&D to packaging, is concentrated in a couple of Asian locations and that leaves the U.S. supply chain incredibly vulnerable to disruption. That's untenable."
This announcement closely follows a recent $6.6 billion subsidy granted to Taiwan Semiconductor Manufacturing Co. (TSMC) to expand its operations in Arizona, further emphasizing the US government's commitment to fortifying domestic chip manufacturing capabilities.
Furthermore, the investment is expected to generate substantial employment opportunities, with over 17,000 construction jobs and 4,500 manufacturing positions projected within the next five years. The deal also includes approximately $40 million designated for job training programs, aimed at upskilling the local workforce to meet the demands of advanced chip manufacturing.
Samsung's venture into chip production in Texas is poised to yield substantial benefits for the US, with plans to produce 2nm chips at its new facility in Taylor. This places Samsung ahead of its competitor, TSMC, by two years in the race to produce chips at the cutting-edge 2nm level of miniaturization.
A man walks past the Samsung logo displayed on a glass door at the company's Seocho building in Seoul on April 5, 2024. Samsung Electronics said on April 5, it expects first-quarter operating profits to rise more than 10-fold year on year as chip prices recover.
US Eyes to Increase Local Chip Production by 20%
The Biden administration aims to increase domestic production of advanced chips to 20% of the world's supply by the end of the decade, a goal reinforced by Samsung's investment.
President Biden stated, "Today's announcement of Samsung's investment in the United States is another example of how my Investing in America agenda and the U.S.-ROK Alliance is creating opportunity in every corner of the country."
Moreover, Samsung's commitment extends beyond commercial endeavors, with the company making pledges to manufacture chips directly for the Department of Defense, contributing to national security objectives.
The $6.4 billion subsidy granted to Samsung signifies a significant step forward in advancing US chip manufacturing capabilities. With the promise of job creation, technological innovation, and bolstered national security, this investment heralds a new era for the semiconductor industry in the United States.
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