The Department of Commerce announced a preliminary agreement today for up to $6.4 billion in direct funding under the CHIPS and Science Act for Samsung Electronics to bring advanced semiconductor manufacturing and research and development (R&D) to central Texas.
President Biden signed the CHIPS and Science Act into law in August 2022, making up to $52 billion of funding available to incentivize semiconductor makers to establish new manufacturing operations in the United States.
Samsung expects to invest over $40 billion on its own in the central Texas region in the coming years, and the Commerce Department said today that the proposed $6.4 billion award would help create over 20,000 jobs.
Specifically, the investment would support Samsung’s existing presence in Texas and turn it into a “comprehensive ecosystem” for semiconductor development and production in the U.S. The funding would support semiconductor factories – also known as fabs – including two new leading-edge logic fabs, an R&D fab, and an advanced packaging facility in Taylor, Texas, as well as an expansion to the company’s existing Austin facility.
“This announcement will unleash over $40 billion in investment from Samsung, and cement central Texas’s role as a state-of-the-art semiconductor ecosystem, creating at least 21,500 jobs and leveraging up to $40 million in CHIPS funding to train and develop the local workforce,” President Biden said in a statement. “These facilities will support the production of some of the most powerful chips in the world, which are essential to advanced technologies like artificial intelligence and will bolster U.S. national security.”
At Samsung’s Taylor, Texas, facilities, the new funding will allow the two leading-edge logic fabs to produce 4nm and 2nm process technologies. The R&D fab will focus on “technology generations ahead of nodes currently in production,” while the advanced packaging facility will produce 3D High Bandwidth Memory and 2.5D packaging – both of which have critical AI applications.
In Austin, the funding will expand Samsung’s existing facility to support the production of “fully depleted silicon-on-insulator (FD-SOI) process technologies,” which are critical to U.S. industries such as aerospace, defense, and automotive.
In addition to the proposed $6.4 billion, Samsung said it plans to claim the Department of the Treasury’s Investment Tax Credit, which is expected to cover up to 25 percent of qualified capital expenditures.
“The chips that Samsung will be making in Texas are important components to our most advanced technologies, from artificial intelligence to high-performance computing and 5G communications,” said Secretary of Commerce Gina Raimondo. “With President Biden’s leadership and Samsung’s commitment to the U.S., this proposed funding advances America’s leadership in semiconductor manufacturing on the world stage.”
“Semiconductor research and development is critical to building a robust and thriving semiconductor manufacturing industry in the United States,” added National Institute of Standards and Technology Director Laurie Locascio. “Samsung’s plans to build a cutting-edge R&D and advanced packaging facilities in Texas are shining examples of the types of R&D projects that will help build, and heavily contribute to, America’s chip manufacturing industry.”
The next step for the Commerce Department after signing the preliminary agreement is to conduct due diligence on Samsung’s proposed project, followed by negotiation of a final award agreement.
The agency has announced six CHIPS and Science Act awards so far. To maximize the impact of the awards, Raimondo announced in February that the Commerce Department is prioritizing chip projects that will be operational by 2030.
