The Biden administration just announced a preliminary agreement to award Samsung up to $6.4 billion in grants as part of CHIPS Act funding. This money will complement the $44 billion in private investment that the company has promised to spend in the state to build a “semiconductor ecosystem.”
This money will be spent to finish a “leading-edge” campus in Taylor, Texas that will focus on research and development of advanced logic technologies, manufacturing and, perhaps most importantly, packaging. When it comes to chips, packaging refers to providing power, inputs and outputs. It’s a highly specialized process that’s typically done overseas, which means that even chips built on US soil have to get shipped to another country and then mailed back. Samsung’s dedicated packaging facility should eliminate some of these headaches and strengthen the overall supply chain.
The money will also go toward an expansion of Samsung’s pre-existing facility in Austin. Taylor and Austin are only 40 minutes away from one another, leading the Biden administration to suggest that the combination of both facilities will turn “Samsung’s existing presence in Texas into a comprehensive ecosystem for the development and production of leading-edge chips in the United States.” The president also says it’ll lead to 21,500 jobs for Texans, with $40 million set aside for training.
The CHIPS and Science Act has given the federal government authority to award funding and offer loans to tech companies to encourage domestic spending. GlobalFoundries received a grant of $1.5 billion back in February to help with a major expansion, in addition to snapping up a $1.6 billion loan. The company plans on spending this money in Malta, New York to build a new fabrication facility that manufactures chips for the automotive, aerospace, defense and AI industries.
Intel recently received the largest CHIPS grant to date, grabbing up to $8.5 billion to continue various US-based ventures. Intel plans on using that money to build some new plants that manufacture semiconductor chips for the AI industry. It’s building two new fabrication facilities in Arizona and two more in Ohio. Intel will also use the financial windfall to modernize a pair of pre-existing plants in New Mexico and one in Oregon. The company says it’ll be investing $100 billion in US-based chip manufacturing, leading to an influx of around 30,000 jobs.
President Biden signed the CHIPS and Science Act into law back in 2022 to encourage domestic semiconductor research and manufacturing in order to lessen America’s reliance on Chinese suppliers. All told, it sets aside $52 billion in tax credits and funding for companies to expand stateside production.