The Biden administration has announced that Samsung, the South Korean electronics giant, will receive $6.4 billion in direct funding under the CHIPS and Science Act to support the company's $40 billion investment in building a massive chipmaking hub in Taylor, Texas, and expanding its existing facility in Austin. This investment is part of the administration's ongoing efforts to transform the U.S. manufacturing sector and bring advanced chipmaking back to the United States.
The tiny semiconductor chips produced at these facilities will be used in a wide range of technologies, from artificial intelligence to medical devices like pacemakers. The new Texas plants will include facilities dedicated to research and development, and will have the capability to not only manufacture the chips but also package them, a process that often requires chips made in the U.S. to be sent to Taiwan.
Commerce Secretary Gina Raimondo described the facilities Samsung is building as "massive," with the first one spanning the size of 11 football fields. She emphasized the significance of Samsung's commitment to conducting core research and development, supporting future manufacturing at scale, and advanced packaging, all within the United States.
The White House estimates that the new plants will create 17,000 construction jobs and more than 4,500 manufacturing jobs, although it will take until the end of the decade for all the plants to be fully functional. The investment also has implications for national security, as Samsung has made commitments to manufacture semiconductor chips directly for the U.S. Department of Defense.
Lael Brainard, Biden's top economic adviser, noted that the investment will "boost our production capacity for chips in critical U.S. industries, including aerospace, defense, and autos. And in doing so, will bolster our national security."
Samsung's investment is part of a larger effort by the Biden administration to bring semiconductor manufacturing back to the United States. Earlier this year, the administration announced grants to Taiwanese company TSMC for a large manufacturing project in Arizona and U.S. company Intel for plants in Arizona, Ohio, New Mexico, and Oregon.
Kye Hyun Kyung, president and CEO of the Device Solutions Division at Samsung, stated, "We're not just expanding production facilities; we're strengthening the local semiconductor ecosystem and positioning the U.S. as a global semiconductor manufacturing destination. To meet the expected surge in demand from U.S. customers, for future products like AI chips, our fabs will be equipped for cutting-edge process technologies and help advance the security of the U.S. semiconductor supply chain."
With Samsung's investment, the U.S. is on track to produce about 20% of the world's advanced logic chips by the end of the decade, according to the Commerce Department. This represents a significant step forward in the Biden administration's efforts to reduce reliance on foreign suppliers and strengthen the domestic semiconductor industry.
The CHIPS and Science Act, signed into law by President Biden in 2022, has been instrumental in attracting these major investments from semiconductor manufacturers. The act provides billions in funding to support the development of advanced chipmaking facilities in the United States, with the goal of ensuring a stable and secure supply of these critical components.
