Samsung receives $6.4 billion in CHIPS grants, will boost production in Texas

What just happened? The latest beneficiary of the CHIPS and Science Act has been announced by the Department of Commerce. As expected, the Biden administration is awarding the money to Samsung, which will receive up to $6.4 billion in grants to expand its chip production operations in central Texas.

According to a statement from President Biden, the preliminary agreement between Samsung and the Department of Commerce will bring the Korean firm’s advanced semiconductor manufacturing and research and development to Texas.

The deal will result in over $40 billion in investment from Samsung, cementing Texas’ role in the advanced semiconductor industry and creating at least 21,500 jobs. There will also be up to $40 million in CHIPS funding used to train and develop the local workforce.

“The return of leading-edge chip manufacturing to America is a major new chapter in our semiconductor industry,” said White House National Economic Adviser Lael Brainard.

Commerce Secretary Gina Raimondo said Samsung’s CHIPS money will help support two new chip production facilities, a research center and a packaging facility for 2.5D packaging at its new site in Taylor, Texas. The first of the new fabs will start making 2nm chips in 2026, according to a senior US official. The second fab will also make chips based on 2nm and 4nm process nodes

The money will also allow Samsung to expand its semiconductor facility in Austin, Texas, about 20 miles from the Taylor site.

The tech giant is expected to invest around $45 billion in constructing and expanding its facilities in Texas by the end of the decade, according to senior administration officials (via Reuters).

This marks the third large allocation of CHIPS money over the last month. In March, Intel became the biggest beneficiary to date, receiving up to $8.5 billion in direct funding and up to $11 billion in low-interest loans. Team Blue plans to spend $100 billion on constructing new manufacturing plants and expanding existing locations across the US over the next few years.

Earlier this month, the US Commerce Department said it had reached a preliminary agreement with TSMC to award it up to $6.6 billion in grants and $5 billion in loans, money that will be used by the company to build a third manufacturing plant in Arizona. TSMC is also making 2nm chips, at its Arizona factory, but they’re not set to go into production until 2028. Unlike Samsung, the Taiwanese company has no plans to bring advanced packaging facilities to the US.

The announcement confirms previous reports that Samsung was next it line to receive billions in grants and loans from the CHIPS act.