Samsung Gets $6.4 Billion to Build Next-gen Chip Factories in Texas

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Key Takeaways

  • Samsung has signed a preliminary deal to receive $6.4 billion from the US for chip factories in Texas.
  • The investment would add four new facilities and expand an existing Austin plant.
  • Samsung joins TSMC as one of the giants receiving funds from the CHIPS and Science Act.

The US Commerce Department has signed a preliminary memorandum for a deal offering up to $6.4 billion to Samsung to build new semiconductor factories in Texas.

The proposed CHIPS and Science Act contribution would help Samsung add two new fabrication plants for 4-nanometer and 2-nanometer chips, a research plant, and an advanced chip packaging facility in Taylor. It would also expand Samsung’s current Austin factory.

Commerce Secretary Gina Raimondo said Samsung’s plans for Texas would help the development of chips for AI, automotive uses, communications and defense, among other purposes.

Jobs would play a role. The tentative investment would earmark up to $40 million for workforce funding.

Samsung is ultimately poised to invest over $0 billion in expansions through the rest of the decade. The Commerce Department claimed the money would support creating over 21,500 jobs.

Samsung joins Intel, Taiwan Semiconductor Manufacturing Company (TSMC), and others in receiving at least proposed CHIPS money in recent months. Signed in 2022, the Act was meant to spur domestic chip manufacturing. The measure theoretically reduces American dependency on China and other countries for technology, avoiding geopolitical and supply chain issues.

Samsung factories in Texas have served numerous high-profile clients, including competitors like Apple. The expansion could help Samsung serve those clients, particularly as they move to 2nm and smaller chips that are denser, faster, and more efficient than today’s parts.

Whether or not the investment has the intended effect isn’t certain. There’s no guarantee Samsung will receive the full funding, or that its facilities will lead to the anticipated new hires. Automation has played an increasing role at factories, and it’s not clear how many of the expected jobs would be permanent or high-paying.

The announcement is nonetheless an initial success for the Biden White House. The administration has sought to revitalize domestic manufacturing in multiple fields, including electric cars, and partnerships with brands like Samsung serve as symbolic (if tentative) steps toward those goals.