Samsung may get $6 bn Chip Subsidy for Texas Expansion

In a move aimed at bolstering domestic chip production, the Joe Biden administration is set to announce $6 billion subsidy to South Korean tech giant Samsung Electronics next week. This subsidy will facilitate Samsung’s expansion of chip output in Taylor, Texas, Reuters news report said.
Galaxy S23 from SamsungThe Commerce Department previously announced incentives for Taiwan Semiconductor Manufacturing (TSMC), Intel, GlobalFoundries, Microchip Technology, and BAE Systems.

The announcement, to be made by Commerce Department Secretary Gina Raimondo, will mark a significant investment in the semiconductor industry within the United States. The subsidy is intended to support the construction of four facilities in Taylor, including a $17 billion chipmaking plant previously announced by Samsung in 2021, alongside additional factories, an advanced packaging facility, and a research and development center.

The subsidy will also encompass an investment in another undisclosed location, effectively doubling Samsung’s U.S. investment to surpass $44 billion as part of the deal. Both the Commerce Department and Samsung declined to provide comments, while requests for comment from Texas Governor Greg Abbott’s office remained unanswered.

The subsidy to Samsung Electronics comes shortly after TSMC was awarded $6.6 billion to expand its investment in the U.S., signaling a concerted effort by the Biden administration to bolster domestic chip manufacturing. This move aligns with the objectives outlined in the Chips and Science Act, which received bipartisan approval in 2022, allocating $52.7 billion in research and manufacturing subsidies to boost domestic semiconductor output.

In 2023, Capex (capital expenditure) of Samsung Electronics reached of KRW 53.1 trillion, including KRW 48.4 trillion spent in the Device Solutions (DS) Division and KRW 2.4 trillion in Samsung Display Corporation (SDC).

Despite its significant investment, Samsung’s expansion in Texas is seen as potentially less politically advantageous for President Joe Biden compared to TSMC and Intel’s expansions in the swing state of Arizona. However, it underscores the administration’s broader strategy to reduce reliance on foreign semiconductor production, particularly in China and Taiwan, where a substantial portion of global chip manufacturing currently resides.

The Joe Biden administration’s absence from the announcement event indicates a focused effort to maintain a non-partisan stance, particularly in light of the upcoming November elections.

While Governor Greg Abbott of Texas has been invited to attend, sources confirm that President Joe Biden will not be present, as he navigates a challenging path towards reelection against Republican rival Donald Trump. News Desk