Samsung Electronics Co. is preparing to finish a $44 billion investment in U.S. chip manufacturing as early as next week, a key project in Washington’s broader effort to bring semiconductor production back to America.
The world’s largest memory chip maker plans to unveil the project with Commerce Secretary Gina Raimondo in Taylor, Texas, based on people aware of the matter. More than $6 billion in U.S. government grants were secured for a capital expenditure that grew significantly over several years to a complete of $44 billion, the people said. The timing and details of the announcement could change before it’s final, the people said, asking to not be identified discussing private matters.
The award is the most recent in a series of multibillion-dollar handouts from the Biden administration, which is attempting to revive American chip manufacturing after a long time of shifting production to Asia with the Chips and Science Act of 2022. The broader program can also be intended to counter the technological rise of China, which is constructing its own domestic semiconductor industry.
The Chips Act, which provided $39 billion in grants and $75 billion in loans and guarantees, has spurred well over $200 billion in private semiconductor investment. Intel Corp. almost got stuck 20 billion dollars for grants and loans. Taiwan Semiconductor Manufacturing Co. – Nvidia Corp.’s fundamental chipmaker. and Apple Inc. – received $11.6 billion. It’s unclear whether Samsung will receive loans along with the greater than $6 billion in government subsidies.
Samsung’s project contributes to a strong semiconductor ecosystem in Texas, including tens of billions of dollars in additional investments from Texas Instruments Inc. in its home state and Samsung’s existing factory in Austin. It’s not clear when the Taylor site will begin mass production, based on a report delay last 12 months. Company officials declined to comment.
Next week’s announcement will kick off a months-long due diligence period during which Samsung and the Commerce Department will work out the ultimate terms of their agreement. The money will then be paid out when the project reaches key construction and production milestones, with the potential for clawbacks if the corporate fails to deliver on its promise.
