U.S. Awards Samsung $6.4 Billion to Bolster Semiconductor Production

The Biden administration will give up to $6.4 billion in grants to Samsung, one of the world’s largest chipmakers, the latest in a slew of awards intended to shore up domestic production of cutting-edge semiconductors.

The money will help Samsung, the South Korean company, fund its new chip manufacturing hub in Taylor, Texas, and expand an existing site in nearby Austin. Samsung will now build an additional manufacturing plant and upgrade a facility under construction in Taylor. It will increase its investment in Texas to roughly $45 billion, up from the $17 billion it announced more than two years ago, administration officials said on Sunday.

Federal officials said the grants would help create a U.S. hub for the development and production of leading-edge semiconductors. Aside from manufacturing chips, Samsung will now construct a research and development facility in Taylor as well as an advanced factory for packaging them, the final step before semiconductors can be used in electronic systems.

The announcement follows other awards that federal officials have made to semiconductor manufacturers in recent weeks. The initiative is funded by the CHIPS Act, which a bipartisan group of lawmakers passed in 2022 to strengthen the domestic supply of semiconductors, the vital components that power everything from phones and computers to cars and weapons systems. The legislation gave the Commerce Department $39 billion to dole out as grants as incentives to chipmakers to construct and expand plants in the United States.

The effort is intended to help reverse a decades-long decline in the U.S. share of global chip manufacturing. Although semiconductors were invented in America, only about 10 percent of the world’s chips are currently made in the United States.

The Samsung grant is the third big award aimed at increasing U.S. production of the most sophisticated semiconductors. Last week, federal officials said they would award up to $6.6 billion in grants to Taiwan Semiconductor Manufacturing Company, the leading maker of the most advanced chips. The administration also announced last month that Intel, a Silicon Valley chipmaker, would receive up to $8.5 billion in grants, which officials said would be the single largest grant under the new program.