To boost domestic semiconductor production, the Biden administration has struck a deal with Samsung Electronics to provide up to $6.4 billion in direct funding. This funding, announced by the Commerce Department, is part of a larger investment exceeding $40 billion, and this includes private money. The initiative aims to establish a cutting-edge computer chip manufacturing and research cluster in Texas.
The funding stems from the CHIPS and Science Act was signed into law by President Joe Biden in 2022. Its primary goal is, to revitalize advanced computer chip production within the United States. Commerce Secretary Gina Raimondo emphasized that this project will propel Texas into a state-of-the-art semiconductor ecosystem, aiming to produce 20% of the world’s leading-edge chips domestically by the end of the decade.
The Samsung cluster, set to be located in Taylor, Texas, will comprise into two factories dedicated to producing four- and two-nanometer chips. Moreover, there will be a research and development facility and a packaging facility for chip components. The project is expected to create over 17,000 construction jobs and even more than 4,500 manufacturing jobs.
According to government sources, the first factory is slated to commence production in 2026, with the second following in 2027. The funding will also facilitate the expansion of an existing Samsung facility in Austin, Texas.
Lael Brainard, director of the White House National Economic Council, highlighted the strategic significance of the project, noting that Samsung will be able to manufacture chips in Austin directly for the Defense Department. This move addresses growing national security concerns regarding access to advanced technology amid global competition, particularly with China.
Furthermore adding to the $6.4 billion in direct funding, Samsung has indicated its intention to claim an investment tax credit from the US Treasury Department. This aligns with the government’s broader strategy to support semiconductor manufacturing within the country.
The government has previously announced terms to support other chipmakers, such as Intel and Taiwan Semiconductor Manufacturing Co., in various projects across the nation. These initiatives collectively aim to strengthen the United States’ position in semiconductor manufacturing and technological development, bolstering national security and economic determination.
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