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Samsung will reportedly receive more than $6 billion in subsidies and grants from the US government to expand chip production in the country. In return, the company will invest over $44 billion to construct two manufacturing plants, an advanced packaging facility, and a research and development center. One of the factories is already under construction and is expected to be operational by the end of this year.
US government to offer Samsung $6 billion in chip subsidies
The US government’s CHIPS and Science Act is proving a massive hit. As part of this act, the Biden administration has set aside a $52.7 billion fund to bolster the domestic semiconductor industry, including $39 billion in direct grants to companies for expanding their chip facilities. TSMC, which gets a $6.6 billion subsidy, has already agreed to increase its investment by $25 billion to $65 billion. It will add a third chip factory to its Arizona site by 2030.
Intel also intends to invest more than $100 billion in the American chip industry over the next five years, expanding production in its existing facilities in Arizona. The US government will award it with $8.5 billion in subsidies and $11 billion in loans. Samsung will get the third-biggest amount under the new act. According to a Reuters report, the Korean firm was also offered loans but it does not plan to take any loans.
Samsung already has a chip factory in Austin, Texas. In 2021, it announced plans to construct a new factory in Taylor, Texas. The project was initially estimated to cost $17 billion. However, various market conditions such as inflation have added to the cost. The company may end up spending well over $20 billion on the new factory, which it hopes to be operational later this year. The facility will be used to produce advanced semiconductor chips.
Samsung’s third chip factory in the US will also be located in Taylor. Early estimates have put its cost at around $20 billion. The packaging facility will cost the company $4 billion. Its new R&D center may span across the two factories. Samsung will also reportedly invest some amount in another undisclosed location, though it may not be significant. The total investment will reach $44 billion, more than double what it originally intended to invest.
An official announcement may come next week
Samsung will reportedly announce this expansion project next week, probably on Monday, April 15. Commerce Department Secretary Gina Raimondo will likely unveil the government’s subsidies and grants for the company on the same day, capping off a string of major grants over the past few weeks. Texas Governor Greg Abbott may attend the event.
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