U.S. provides up to $6.6 billion in chip subsidies to Samsung for Texas expansion

Alexandra Alper

WASHINGTON (Reuters) – The Biden administration plans to announce more than $6 billion in aid to South Korea’s Samsung (KS:) next week to boost chip production in Taylor, Texas, to increase chip manufacturing in the United States. People familiar with the matter said:

The grants, to be unveiled by Commerce Secretary Gina Raimondo, will be used to build four facilities in Taylor, including a $17 billion chip manufacturing plant that Samsung announced in 2021, as well as another factory, an advanced packaging facility and a research and development center. am. one of the sources said.

It will also include investments in other undisclosed locations, the sources said, adding that as part of the deal, Samsung will more than double its U.S. investments to more than $44 billion.

The Commerce Department and Samsung declined to comment. Texas Gov. Greg Abbott’s office did not respond to a request for comment.

One of the sources said the program would be the third largest after Taiwan’s TSMC, which received $6.6 billion in payments Monday and agreed to expand investments from $25 billion to $65 billion and add a third Arizona plant by 2030. He said it would happen.

The announcement will end a series of major chip and science subsidies in quick succession as the United States seeks to expand domestic chip production and lure capital that might otherwise have been used to build factories in China and the region.

In 2022, Congress approved the Chip and Science Act to increase domestic semiconductor production with $52.7 billion in research and manufacturing subsidies. Lawmakers also approved $75 billion in government borrowing authority, but one of the sources said Samsung does not plan to receive the loan.

The goal of the CHIPS Act is to reduce dependence on China and Taiwan as the U.S. share of global semiconductor manufacturing capacity declines from 37% in 1990 to 12% in 2020, according to the Semiconductor Industry Association.

U.S. President Joe Biden will not attend the event, the two people said. He is facing an uphill battle against former president and Republican rival Donald Trump to win re-election in November. Republican Texas Governor Greg Abbott has been invited to attend, one of the officials added.

TSMC and Intel (NASDAQ:), which received $8.5 billion last month to expand U.S. chip production, are both set to increase production in the key swing state of Arizona, but Samsung’s expansion in reliably Republican Texas is unlikely to help Biden. It appears to be less. At the polling place.