Samsung Receives $6.4 Billion from U.S. to Construct New Chip Factories in Texas

Samsung Receives $6.4 Billion from U.S. to Construct New Chip Factories in Texas.

Samsung Receives $6.4 Billion from U.S.: South Korean chip maker Samsung will get $6.4 billion in subsidies from the U.S. government to build advanced manufacturing facilities in Austin.

Samsung will build a chip manufacturing facility in Taylor, Texas, and expand one in Austin.

A $40 billion investment by Samsung will upgrade a chip factory in Taylor, Tex., build a second factory by the end of the decade, and add a research and development center.

President Obama's plan to bring back leading-edge chip manufacturing to the United States will be bolstered by the Samsung award, according to Lael Brainard, director of the National Economic Council.

In addition to creating more than 4,500 manufacturing jobs, Samsung will receive approximately $40 million in grants for training and development.

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Also part of Samsung's plan is an "advanced packaging" facility, which will prepare chips and electronic components for cars, planes, phones, and thousands of other things.

On Sunday, administration officials announced that it will increase its investment in Texas to roughly $45 billion, up from $17 billion announced two years ago.

Samsung's deal comes a week after Taiwan Semiconductor Manufacturing Co. got a $6.6 billion subsidy to expand in Arizona.

U.S. and foreign companies will be able to get subsidies worth $39 billion under the 2022 CHIPS Act.

A U.S. semiconductor hub will be created with the help of these grants, according to federal officials. In addition to manufacturing chips, Samsung will also construct a research and development facility in Taylor as well as a factory for packaging them, which will be the final step before semiconductors can be used in electronic devices.

As an incentive to construct and expand facilities in the United States, the Commerce Department was given $39 billion to distribute as grants.

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While semiconductors were invented in America, only about 10 percent of the world's chips are currently made in the U.S. The effort aims to reverse a decades-long decline in the U.S. share of global chip manufacturing.

Despite the fact that some of the most advanced computer chips are designed by U.S. companies such as Intel and Nvidia, most of them are built in Taiwan and South Korea.

As AI algorithms require more advanced chips to run, calls from industry and national security leaders to expand U.S. chip production have become more urgent.

In order to make the most advanced computer chips, which are many times smaller than a human red blood cell, it is devilishly difficult.

As Asian companies developed ever more advanced manufacturing techniques, the United States fell behind as American companies moved production overseas decades ago in search of lower labor costs.

Samsung has most of its factories in South Korea. However, it opened a facility in Austin in 1996 to produce memory chips and later logic chips for products such as Apple's iPhone.

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