Biden administration greenlights $6.4 billion for Samsung chip production in Texas

The Biden administration has agreed to allocate up to $6.4 billion to Samsung Electronics to establish a cutting-edge computer chip manufacturing and research hub in Texas. Announced by the Commerce Department on Monday, this funding is part of a larger investment expected to surpass $40 billion, including private contributions. This initiative stems from the CHIPS and Science Act, enacted by President Joe Biden in 2022 to boost domestic production of advanced semiconductors.

Commerce Secretary Gina Raimondo highlighted that this project would transform Texas into a leading semiconductor hub and is a step towards the U.S. achieving a target of producing 20% of the global supply of top-tier chips by 2030. Raimondo projected that the endeavor would generate at least 17,000 construction jobs and over 4,500 manufacturing positions.

The planned cluster in Taylor, Texas, is set to house two factories producing highly sophisticated four- and two-nanometer chips, alongside a dedicated research and development facility and a packaging unit for chip components. The first of these factories is slated to begin operations in 2026, with the second following in 2027.

The agreement also includes plans to enhance an existing Samsung facility in Austin, Texas. Lael Brainard, director of the White House National Economic Council, noted that this expansion would enable the production of chips directly for the U.S. Defense Department, addressing national security needs amid growing U.S.-China tensions.

Furthermore, Samsung plans to utilize an investment tax credit offered by the U.S. Treasury Department, adding to the $6.4 billion funding. The U.S. government has made similar financial commitments to other major chipmakers like Intel and Taiwan Semiconductor Manufacturing Co., supporting several projects nationwide.