Manufacturing
Samsung Set to Receive $6.4B from US for Texas Fab Projects
Samsung Electronics plans to expand its plant in Austin and is building a pair of fabs plus related facilities nearby in Taylor, Texas.
Photo courtesy of Samsung
The U.S. Dept. of Commerce is prepared to provide Samsung Electronics with $6.4 billion in direct funding to support construction of two chip plants and expansion of another facility in Texas. Officials signed a nonbinding preliminary memorandum of terms with the company, they announced April 15.
The funding is to support more than $40 billion that Samsung is investing in the construction of a pair of leading-edge semiconductor fabrication plants, or fabs, plus research and chip packaging facilities in Taylor, Texas, and in the expansion of an existing fab in Austin, said the Commerce Dept. In addition to the direct funding, Samsung indicated it plans to claim an investment tax credit covering up to 25% of certain capital costs.
“We’re not just expanding production facilities; we’re strengthening the local semiconductor ecosystem and positioning the U.S. as a global semiconductor manufacturing destination,” said Kye Hyun Kyung, president and CEO of Samsung Electronics’ device solutions division, in a statement.
Plans call for 6 million sq ft of buildings at the Taylor site, designed by Jacobs. Yates Construction Co. started work in July 2022. The first plant is expected to be operational by 2026.
Details about the Austin expansion project were not immediately available. The plant, built in 1996, is modeled after Samsung’s Hwaseong semiconductor plant in Korea and includes 2.8 million sq ft of buildings with two fabs, according to the company.
The projects are together expected to involve more than 17,000 construction jobs, according to the Commerce Dept.
The public funding to support the projects comes from 2022’s CHIPS and Science Act. The law set aside $39 billion to incentivize construction, expansion and modernization of semiconductor facilities as part of an effort to shore up chip making in the U.S.
The Biden administration had positioned the move as critical for both the economy and for national security because chips are widely used in consumer goods, telecommunications gear and military equipment.
“Proposed CHIPS investments like the ones we are announcing today will be a catalyst for continued private-sector investments to help secure the long-term stability we need to put America at the beginning of our semiconductor supply chain and to safeguard a strong resilient ecosystem here at home,” U.S. Commerce Secretary Gina Raimondo said in a statement.
Chips made by Samsung at the Texas plants would be for artificial intelligence, high-performance computing and 5G communications. The preliminary terms also include a commitment for Samsung to collaborate with the U.S. Dept. of Defense at the Austin facility.
The announcement of the preliminary deal with Samsung came a week after Commerce Dept. officials said they had reached a similar agreement with TSMC to provide it with $6.6 billion to support its fab projects in Arizona. The CHIPS program has also offered $8.5 billion to Intel for its projects in Arizona, New Mexico, Ohio and Oregon; $1.5 billion to GlobalFoundries for projects in New York and Vermont; and smaller funding amounts to BAE Systems Inc. and Microchip Technology Inc.
