Biden admin agrees to provide $6.4 billion to Samsung for making computer chips

By James On Apr 15, 2024

WASHINGTON — The Biden administration has reached an agreement to provide up to $6.4 billion in direct financing to Samsung Electronics to develop a computer chip manufacturing and research cluster in Texas.

The financing announced by the Commerce Department on Monday is part of a total investment in the cluster that, with private money, is expected to exceed $40 billion. The government support comes from the CHIPS and Science Act, which President Joe Biden signed into law in 2022 with the aim of revitalizing the production of advanced computer chips domestically.

“The proposed project will bring Texas into an advanced semiconductor ecosystem,” Commerce Secretary Gina Raimondo said on a call with reporters. “It puts us on track to achieve our goal of producing 20% of the world’s leading chips in the United States by the end of this decade.”

Raimondo said she expects the project to create at least 17,000 construction jobs and more than 4,500 manufacturing jobs.

Samsung’s cluster in Taylor, Texas, would include two factories that would make four- and two-nanometer chips. There would also be a factory dedicated to research and development, as well as a facility for packaging around chip components.

According to the government, the first factory would start production in 2026, and the second in 2027.

The financing would also expand an existing Samsung facility in Austin, Texas.

Lael Brainard, director of the White House National Economic Council, said this will allow Samsung to produce chips directly for the Defense Department in Austin. Access to advanced technology has become a major national security issue amid competition between the US and China.

In addition to the $6.4 billion, Samsung has indicated that it will also claim an investment tax credit from the US Treasury Department.

The government previously announced conditions to support other chipmakers, including Intel and Taiwan Semiconductor Manufacturing Co., in projects across the country.