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The Biden administration has allocated up to $6.4 billion in grants to Samsung Electronics in South Korea to expand its chip production facilities in central Texas. This funding will support the development of two chip production facilities, a research center, and a packaging facility in Taylor, Texas. It will also allow Samsung to expand its semiconductor facility in Austin, Texas, ultimately increasing chip output for industries such as aerospace, defense, and automotive, as well as enhancing national security.

Commerce Department Secretary Gina Raimondo emphasized that these investments will position the United States as a global leader in semiconductor design, manufacturing, advanced packaging, and research and development. Samsung Electronics Co-CEO Kyung Kye Hyun stated that the company’s fabs will be equipped for cutting-edge process technologies to meet the anticipated surge in demand from US customers for future products like AI chips and to ensure security in the US semiconductor supply chain. Production is expected to begin in 2026, with estimates suggesting the production of 4-nanometer chips initially and a potential expansion to 2-nanometer chips.

The Biden administration’s announcement designates Samsung as the third-largest recipient of Chips Act awards, following Intel and Taiwan’s TSMC. The administration’s goal with these investments is to reduce reliance on China and Taiwan for semiconductor manufacturing, as the US share of global semiconductor production has decreased significantly over the years. Lawmakers have expressed concerns about dependency on chips manufactured in Taiwan due to geopolitical tensions with China. By investing in local semiconductor manufacturing, the US aims to secure its semiconductor supply chain, enhance national security, boost global competitiveness, and create new job opportunities for Americans.

According to senior administration officials, Samsung is expected to invest around $45 billion in building and expanding its Texas facilities over the next decade. The Semiconductor Industry Association (SIA) commended Samsung for its investment in US-based manufacturing and praised the US Commerce Department for progressing in the implementation of the CHIPS Act’s manufacturing incentives and research and development programs. The grants awarded to Samsung are part of a broader effort to strengthen the US chipmaking industry and reduce reliance on foreign countries for critical technologies.

In addition to Samsung, Intel received $8.5 billion in grants in the previous month, while Taiwan’s TSMC was awarded $6.6 billion in April to bolster their American production capabilities. These investments in semiconductor manufacturing are seen as essential for securing the US semiconductor supply chain, enhancing national security, and supporting economic growth and job creation. By incentivizing companies like Samsung to expand their production facilities in the United States, the Biden administration aims to revitalize domestic chip manufacturing and reduce reliance on foreign suppliers in an increasingly competitive global market.

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