Samsung Secures $6.4B to Expand Chip Production in Texas

Samsung is the latest semiconductor manufacturer to receive government funding to expand its production efforts in the U.S.

As part of an agreement with the Department of Commerce, Samsung will receive $6.4 billion in direct funding under the CHIPS and Science Act to expand its presence in Texas.

Samsung will build two new edge chip production sites, a research and development facility and a packaging plant in Taylor, as well as expand its existing site in Austin.

The company will also benefit from tax credits of up to 25% on its investments.

The Commerce Department said with this latest commitment, the U.S. is on track to produce 20% of the world’s chips by 2030.

“This announcement will unleash over $40 billion in investment from Samsung, and cement central Texas’s role as a state-of-the-art semiconductor ecosystem, creating at least 21,500 jobs and leveraging up to $40 million in CHIPS funding to train and develop the local workforce,” said President Biden.

Samsung’s proposed Taylor site would manufacture two and four-nanometer chips while the research and development center would develop next-generation hardware solutions.

The packaging plant, meanwhile, would produce memory solutions to power AI applications, as well as hardware tailored for industries including automotive, communications and defense.

Related:US Chip Manufacturing Boosted by $6.6B Funding Deal

Samsung has been present in Austin for almost 30 years. An expansion of the existing site would help in the production of Fully Depleted Silicon on Insulator (FD-SOI) process hardware, used in industries where devices handle radio frequencies, such as automotive.

Samsung is already building a chip plant in Taylor, some 30 miles from the state’s capital of Austin, with construction set to finish later this year.

In Austin, the chipmaker is reusing 96% of its waste. The proposed Taylor site would use carbon-free electricity and conserve its water usage. Chipmaking sites use extensive amounts of water to ensure wafers are free of dust and debris.

“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," said Kye Hyun Kyung, president and CEO of Samsung’s device solutions division. "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.”

Samsung sought expansion of efforts in Texas before the CHIPS Act was passed. 

Related:US Chip Manufacturing Boosted by $6.6B Funding Deal

In July 2022, the company expressed an interest in building as many as 11 chip plants in the Lone Star State.

Samsung is also expanding its chipmaking efforts in Korea, including building the world’s largest chip plant on the outskirts of the capital Seoul.

Samsung is the latest chip manufacturer to secure funding from the CHIPS and Science Act. 

In the last month, Taiwan Semiconductor Manufacturing Company and Intel secured funding agreements to expand their U.S. facilities.

The Semiconductor Industry Association (SIA) praised the impact of the CHIPS and Science Act, which incentivizes chip manufacturers to establish their presence in the U.S.

“Today’s announcement will help Samsung bring more semiconductor production, innovation, and jobs to U.S. shores, reinforcing America’s economy, competitiveness and critical chip supply chains,” said John Neuffer, SIA president and CEO. “We applaud Samsung for investing boldly in U.S.-based manufacturing and salute the U.S. Commerce Department for making significant headway in implementing the CHIPS Act’s manufacturing incentives and R&D programs.”