By Leah Douglas
(Reuters) -The Biden administration will award up to $6.4 billion in grants to South Korea’s Samsung to expand its chip production in central Texas as part of a broader effort to boost U.S. chipmaking, the Department of Commerce said on Monday.
The funding from the 2022 Chips and Science Act will boost chip production for the aerospace, defense, and auto industries and bolster national security, administration officials told reporters.
“The return of leading-edge chip manufacturing to America is a major new chapter in our semiconductor industry,” said White House National Economic Adviser Lael Brainard.
Reuters previously reported that the announcement would make Samsung the program’s third largest recipient of Chips Act grants, behind Intel’s $8.5 billion and TSMC’s $6.6 billion awards respectively.
The CHIPS Act’s goal is to reduce reliance on China and Taiwan, as the share of global semiconductor manufacturing capacity in the U.S. has fallen from 37% in 1990 to 12% in 2020, according to the Semiconductor Industry Association.
Lawmakers have warned that U.S. dependence on chips manufactured in Taiwan by the world’s top contract chip manufacturer TSMC is risky because China claims the self-governed island as its territory and has reserved the right to use force to retake it.
The subsidy will support two chip production facilities, a research center and a packaging facility, Commerce Secretary Gina Raimondo said on the call, confirming the Reuters report.
It will also enable Samsung to expand its Austin, Texas, semiconductor facility, Raimondo said.
“(These investments) will allow the U.S. to once again lead the world, not just in semiconductor design, which is where we do now lead, but also in manufacturing, advanced packaging, and research and development,” Raimondo said.
Samsung is expected to invest roughly $45 billion in building and expanding its Texas facilities through the end of the decade, said senior administration officials.
(Reporting by Leah Douglas; Editing by Aurora Ellis and Jonathan Oatis)
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