The US government has agreed to provide Samsung Electronics with $6.4 billion of direct funding to build microchips in Texas.
President Joe Biden said the semiconductor agreement, part of the 2022 Chips and Science Act, "will unleash over $40 billion in investment from Samsung", which already has manufacturing operations in Austin, Texas (see photo).
The funding, confirmed today after being rumoured last week, will provide a boost to semiconductor production for the aerospace, defense and automotive industries, while reducing reliance on overseas factories, particularly those in China.
"These facilities will support the production of some of the most powerful chips in the world, which are essential to advanced technologies like artificial intelligence and will bolster US national security," the president said in a statement.
The CHIPS Act, short for the ‘Creating Helpful Incentives to Produce Semiconductors for America', is a legislative initiative aimed at revitalising and strengthening the semiconductor industry in the US.
The act was signed in response to the growing strategic importance of semiconductors in everything from consumer electronics to advanced military systems, and includes around US$53 billion worth of funding.
Today's agreement follows other similar grant deals recently, with Taiwan Semiconductor (NYSE:TSM) last week getting $6.6 billion toward plans to build chipmaking plants in America, plus up to $5 billion in low-cost loans. This aims to support TSMC's existing $65 billion US investment plans.
Intel was awarded $8.5 billion CHIPS grant last month to develop production sites in Arizona and Ohio.