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Samsung is set to receive $6.4 billion in US federal funding as a result of President Biden's CHIPS & Science Act.
This grant adds to Samsung's own investment of over $40 billion in its US manufacturing and will support its upcoming Texas semiconductor factories expected to begin operations as soon as 2026, according to a senior US official cited by The Financial Times.
Samsung will construct new chip manufacturing plants in Taylor, Texas, and will also expand its existing Austin factory with the funding. The White House says Samsung's efforts will create about 21,500 US jobs. One of the factories is expected to be roughly the size of 11 football fields, NPR reports.
"It will boost our production capacity for chips in critical US industries, including aerospace, defense and autos. And in doing so, will bolster our national security," said Lael Brainard, an economic advisor for President Biden, during a press conference on the news.
Samsung is the latest big tech firm to receive US federal funding to build advanced semiconductor chips in the country, following Intel and TSMC. Intel is receiving $8.5 billion in federal grants and up to $11 billion in loans to build plants in multiple states, while TSMC is getting $6.6 billion in federal grants and up to $5 billion in loans to build chip factories in Arizona.
Biden is granting these massive government subsidies for tech giants because his administration wants to see the US produce 20% of the world's most advanced computer chips. Currently, the US is producing less than 10% of the world's chips—and none of the most advanced ones.
"Much of the semiconductor supply chain?.?.?.?is concentrated in a couple of Asian locations, and that leaves the US supply chain incredibly vulnerable to disruption," US Secretary of Commerce Gina Raimondo told FT Monday.
Biden previously visited Samsung's campus in Pyeongtaek, South Korea in 2022. Afterward, he said that visiting Samsung's semiconductor facility there was "emblematic of the future of cooperation and innovation that our nations can and must build together."
Biden's CHIPS Act promises about $53 billion in total federal investment toward US chip manufacturing, and also allows for a 25% tax credit for capital investments in the sector.