The U.S. government has recently offered Samsung Electronics Co Ltd a substantial grant of up to $6.4 billion to fuel the development of semiconductor manufacturing and research facilities in Texas. This investment is part of Samsung’s larger plan to invest over $40 billion in the state, with the aim of establishing a series of semiconductor factories to meet the rising demand from U.S. customers.
The proposed investments are expected to solidify central Texas’s position as a cutting-edge semiconductor hub, creating a significant number of jobs in the process. South Korean tech giant Samsung has plans to build a cluster of semiconductor factories that will generate at least 21,500 job opportunities.
Despite this positive development, Samsung’s shares in South Korea experienced a slight dip of around 2.7 percent on Tuesday. However, the Biden Administration announced that the U.S. Department of Commerce and Samsung have signed a preliminary memorandum of terms (PMT) for the funding under the CHIPS and Science Act.
The U.S. Department of Commerce highlighted that this investment is crucial for enhancing the resilience of the U.S. semiconductor supply chain, advancing U.S. technology leadership, and boosting U.S. global competitiveness in the semiconductor industry. By 2030, it is estimated that the U.S. will produce about 20% of the world’s leading-edge logic chips.
President Biden emphasized that the investments made through the CHIPS and Science Act are essential for addressing vulnerabilities in the country’s supply chain and reclaiming U.S. leadership in semiconductor manufacturing. The facilities to be established in Texas will support the production of powerful chips crucial for advanced technologies like artificial intelligence and will contribute to bolstering U.S. national security.
A portion of the funding will be dedicated to training and developing the local workforce, with over $40 million from CHIPS funding allocated for this purpose. Samsung plans to split the proposed investment across various projects in Taylor and Austin, Texas, transforming Samsung’s existing presence in the state into a comprehensive ecosystem for chip development and production.
The investment will be used to create new manufacturing capacity and capabilities for essential chips catering to industries such as automotive, consumer technology, IoT, and aerospace, among others. The projected expansion is expected to generate over 21,500 job opportunities, including construction and manufacturing roles.
Kye Hyun Kyung, President and CEO of the Device Solutions Division at Samsung, stressed that the investments are not only expanding production facilities but also strengthening the local semiconductor ecosystem in the U.S. The ultimate goal is to position the U.S. as a global semiconductor manufacturing destination and ensure the security of the U.S. semiconductor supply chain.
