Samsung may get a massive grant from the US government to expand its semiconductor facilities in the country. The Biden administration plans to award more than $6 billion to the Korean firm to fund its expansion projects. The company already has a chip factory in Austin, Texas, and is building another in Taylor, Texas. TSMC, which is also constructing its second chip plant in the US, will get a $5 billion grant.
US government to give Samsung $6 billion for chip plants
Samsung is one of the world’s largest semiconductor companies and the second-biggest foundry after TSMC. Along with designing, developing, and manufacturing chips in-house, it also manufactures chips designed by other fabless firms such as Qualcomm. The company operates three manufacturing facilities in its homeland, South Korea, and one in the US (Austin). The Taylor plant may be operational in 2025.
In recent years, the US government has been encouraging semiconductor firms to expand production in the country. As part of the CHIPS and Science Act, it is offering $52.7 billion to companies for American semiconductor research, development, manufacturing, and workforce development, including $39 billion in direct grants. Samsung, TSMC, and other industry players have all applied for grants under this act.
Bloomberg recently reported that Samsung will get more than $6 billion while TSMC will receive over $5 billion. According to the publication, which cites anonymous people familiar with the matter, this is a preliminary agreement. The final decision is yet to be made, so the amount may vary. Both firms should still get a huge sum of money from the US government. An official announcement may follow soon.
Intel may get a bigger grant
Samsung and TSMC’s American rival, Intel, may get a bigger sum of money from the US government. The firm is reportedly set to receive over $10 billion in grants and loans. It may also take home an additional $3.5 billion in grants for the production of military chips. Intel had opposed the idea of providing grants to foreign companies from the US taxpayers’ money.
These grants will certainly help boost the US semiconductor supply chain in the future. Samsung’s upcoming plant in Taylor was originally estimated to cost $17 billion but may end up costing $25 billion. A help of $6 billion from the US government would be huge. TSMC, which has a chip plant in Washington, is investing $40 billion in its upcoming factory in Phoenix, Arizona. Originally slated to be operational in 2026, it has been delayed to 2027 or 2028.
2024-03-15 15:06:09