Samsung Electronics Co. plans to invest roughly $17 billion in a chip manufacturing plant in Taylor, Texas, according to sources familiar with the matter, a massive investment by the South Korean tech giant as the Biden administration pushes for increased semiconductor production in the United States.

Texas Gov. Greg Abbott (R) revealed the arrangement Tuesday evening during a news conference in Austin. The contract had already been reported by multiple news media. Construction is scheduled to commence in the early part of next year.

Samsung said the factory would create 2,000 high-tech jobs. Additionally, Abbott stated in a press release that the project would create at least 6,500 construction positions.

Samsung is a leading manufacturer of electronic products and the semiconductors that power them. The Texas facility will manufacture advanced semiconductors for the company's contract manufacturing, or foundry, operations.

It is the latest chipmaker to increase its investment in the U.S. at a time when manufacturers are seeking to expand production and regulators are ready to promote that expansion. Both the White House and U.S. Congress have emphasized the importance of American chip production.

Intel said in March that it would invest an estimated $20 billion in two new plants in Arizona. Taiwan Semiconductor Manufacturing Co. broke ground in June on a $12 billion factory in Arizona. And Texas Instruments has announced plans to expand its semiconductor manufacturing operations in Sherman, Texas, as part of a $30 billion investment.

Texas experienced a multi-day, widespread power outage last winter, resulting in around 300-400 billion won ($254-339 million) in damage to Samsung's existing chip facility in Austin, Texas.

Samsung anticipates that its chip manufacturing capacity, which is presently 80 %greater than it was in 2017, will triple by 2026. Numerous businesses are in dire need of chips, prompting the rush of projects.

"I'm extremely confident that the electrical grid is robust, resilient, and reliable," Abbott said Tuesday in response to a question concerning the plant's electricity source.

Based on previous reports by Reuters, the new location in Williamson County, Texas, which includes the city of Taylor, offered the best incentive package of the places Samsung was considering.

The administration of U.S. President Joe Biden has pledged billions of dollars in federal financing to enhance chip manufacture and research in order to maintain a competitive edge over China in innovative technologies and to alleviate shortages in crucial industries such as automotive.

The chip scarcity has come at a high cost to the world's major automakers, which will make 7.7 million fewer vehicles and lose $210 billion in revenue this year, consultancy firm AlixPartners said.