Samsung to receive $6.4bn from US authorities for chip production

The Biden administration plans to provide $6.4 billion in grants to Samsung to increase chip production in Texas as part of a programme to support domestic semiconductor manufacturing.

Here's What We Know

The South Korean company plans to invest more than $40 billion in two foundries that will become benchmarks in the production of advanced 4-nm and 2-nm chips.

In addition, the large-scale project includes the creation of a research and development centre and a chip packaging factory in Texas, which will help produce high-bandwidth memory chips that are critical for artificial intelligence.

The grant will be used to expand Samsung's already active chip fab in Austin, Texas, which serves the US aerospace, defence and automotive industries.

To date, this is the last known grant awarded to the tech giant. In 2022, the US government passed the Chip and Science Act to revive US chip manufacturing after decades of stagnation and a focus on Asia. It is also a method of countering the technological development of China, which is building its own semiconductor industry.

Unlike Intel or TSMC, which have also received or will receive multibillion-dollar grants, Samsung has decided not to use loans or loan guarantees under the Chip Act. Instead, the Koreans will receive an investment tax credit.

Source: Bloomberg