Introduction:
In a significant move aimed at strengthening the domestic semiconductor industry, the Biden administration has awarded a substantial $6.4 billion grant to Samsung, one of the world’s leading chipmakers. This grant is part of a broader initiative funded by the CHIPS Act, which aims to bolster the U.S. supply of cutting-edge semiconductors. This includes crucial components powering various technologies ranging from smartphones to defense systems.
Samsung joins the ranks of major technology companies receiving U.S. federal funding to construct advanced semiconductor chip facilities within the country, following in the footsteps of Intel and TSMC.
The Biden administration is providing substantial government subsidies to tech giants with the goal of increasing U.S. production to 20% of the world’s most advanced computer chips. Presently, the U.S. produces less than 10% of global chips, with none being the most advanced.
The funding provided to Samsung will support the establishment of a new chip manufacturing hub in Taylor, Texas, as well as the expansion of an existing facility in nearby Austin. Samsung’s investment in Texas is set to increase to approximately $45 billion. This marks a substantial uptick from the initial $17 billion commitment made over two years ago.
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Key Highlights of the Samsung Chips act Grant Include:
Intel has been allocated $8.5 billion in federal grants and up to $11 billion in loans for building plants across various states. TSMC is set to receive $6.6 billion in federal grants and up to $5 billion in loans for establishing chip factories in Arizona.
This grant supplements Samsung’s substantial investment of more than $40 billion in its U.S. manufacturing endeavors. This will facilitate the development of its forthcoming semiconductor facilities in Texas, anticipated to commence operations by 2026.
With this funding, Samsung plans to establish new chip manufacturing facilities in Taylor, Texas, while also expanding its current factory in Austin.
The White House projects that Samsung’s initiatives will generate approximately 21,500 jobs in the United States.
Read More: $44 Billion : Why Is Samsung Increasing Semiconductor Investment in US?
Samsung Chips act Grant : Advanced Packaging Facility:
Samsung will build an advanced factory for packaging chips. This facility will focus on innovative packaging technologies to enhance computing power and connectivity.
Samsung Chips act Grant : Support for National Security
The expansion of Samsung’s Austin facility will directly supply chips to the Defense Department. This will help to support industries critical for national security such as aerospace, defense, and automotive.
“It will boost our production capacity for chips in critical US industries, including aerospace, defense and autos. And in doing so, will bolster our national security,”
~Lael Brainard, an economic advisor for President Biden
Samsung Chips act Grant : Tax Credits and Federal Support
The federal tax credits will be claimed by Samsung. This covers 25% of the cost of building and outfitting the Texas factories with production equipment. This further incentives its investment in domestic chip production.
Read More: Samsung Steals $752 Million AI Chip Deal with Mach-1 from Nvidia
Research and Development:
The establishment of a research and development facility by Samsung will focus on advancing manufacturing processes to enhance computing power and storage capabilities of chips. This facility will play a vital role in ensuring the country’s access to cutting-edge developments in semiconductor technology.
GlobalFoundries, Microchip Technology, and BAE Systems:
Prior to Samsung, the Biden administration had awarded grants totaling over $23 billion to other semiconductor manufacturers. This includes GlobalFoundries, Microchip Technology, and BAE Systems.
Conclusion:
The Biden administration’s initiatives like the CHIPS Act are crucial for boosting national security. This not only revitalizes the semiconductor industry but also maintains global technological competitiveness.
