Samsung to invest $40b in the Texas chip plant and get $6.4b from the government.

An agreement has been reached by the Biden administration to give Samsung Electronics up to $6.4 billion in direct assistance to establish a computer chip manufacturing and research center in Texas.

The Commerce Department’s funding announcement on Monday is a portion of a larger investment in the cluster that is anticipated to surpass $40 billion when combined with private funds. The CHIPS and Science Act, which President Joe Biden signed into law in 2022 to restore the home production of cutting-edge computer chips, provides the government’s support.

During a call with reporters, Commerce Secretary Gina Raimondo stated, “The proposed project will propel Texas into a state-of-the-art semiconductor ecosystem.” By the end of the decade, we should be able to produce 20% of the world’s cutting-edge chips in the United States because of this development.

According to Raimondo, the project is expected to generate around 4,500 manufacturing employees in addition to at least 17,000 construction jobs.

There would be two plants in Samsung’s Taylor, Texas cluster that would produce semiconductors with and without nanometers. There would also be a facility for the packaging that encloses chip components and a factory devoted to research and development.

The government anticipates that the first factory will open for business in 2026 and the second in 2027. 

Also, an existing Samsung facility in Austin, Texas, would be expanded with the financing. 

Samsung will be able to produce semiconductors for the Defence Department directly in Austin as a result, according to Lael Brainard, director of the White House National Economic Council.

Amidst competition between the United States and China, access to cutting-edge technology has emerged as a significant national security concern.

Samsung has stated that it will apply for an investment tax credit from the US Treasury Department in addition to the $6.4 billion.

In the past, the government has made plans to fund projects across the nation for other semiconductor manufacturers, such as Intel and Taiwan Semiconductor Manufacturing Co.