Samsung amplifies chip-manufacturing in Texas with $44 billion investment commitment
What's the story
Samsung is set to significantly bolster its investment in Texas, raising its total commitment to the state's chip-manufacturing industry to an impressive $44 billion, as reported by The Wall Street Journal. This decision follows Samsung's initial investment of nearly $20 billion in 2021, for the construction of a manufacturing plant. The additional funds will be directed toward establishing a new chip production facility, a packaging site, as well as a research and development center in or around Taylor, Texas.
Impact
CHIPS Act fuels Samsung's investment surge
Samsung's investment surge appears to be a direct response to the CHIPS and Science Act, signed into law by US President Joe Biden. The Act aims to attract global chipmakers to establish operations on US soil. To further this goal, Washington is planning to provide Samsung with over $6 billion as an additional incentive to maintain its operations within the United States.
Information
Taylor presents an ideal location for Samsung's expansion
Taylor is home to Samsung's existing semiconductor facility, which is not yet operational but is expected to start producing essential logic chips later this year. Conveniently located just 40 minutes from Austin, the town offers an ideal location for Samsung's expansion.
Legislative goals
CHIPS Act aims to boost domestic production
The CHIPS and Science Act was enacted by the Biden administration in 2022, with the objective of promoting domestic semiconductor research and production. The Act also seeks to reduce America's dependence on Chinese suppliers, by allocating $52 billion in tax credits and funding for companies to enhance production within the US. This legislation is a significant step toward fostering domestic growth in the semiconductor industry.
Funding boost
It stimulates domestic tech spending
The CHIPS Act has empowered the federal government to offer funding and loans to various tech companies, stimulating domestic spending. Earlier this year, GlobalFoundries, an international semiconductor company, received a grant of $1.5 billion and a loan of $1.6 billion for considerable US expansion. The company plans to construct a new chip-making facility in Malta, New York that will serve diverse sectors such as automotive, aerospace, defense, and AI industries.
Major grant
Intel receives largest grant for US operations
Intel has been awarded the largest CHIPS grant to date - a substantial $8.5 billion for maintaining various US-based operations. The company plans to use these funds to construct plants that manufacture advanced semiconductor chips for AI and other high-tech applications. Intel's expansion includes two new facilities in Arizona and Ohio, upgrades for two existing plants in New Mexico, and an expansion in Oregon, with a total investment of $100 billion expected in US-based chip manufacturing.