The Biden administration is awarding Samsung Electronics (OTCPK:SSNLF) up to $6.4 billion in grants to build chip manufacturing facilities in Central Texas as part of the CHIPS and Science Act of 2022.
“This announcement will unleash more than $40 billion in investment from Samsung solidify Central Texas’ role as a cutting-edge semiconductor ecosystem, creating at least 21,500 jobs and leveraging up to $40 million in CHIPS funding to train and develop the local workforce,” said President Joe Biden. She said in a statement released Monday by the White House.
The direct funding will go toward building two chip factories to produce advanced 2nm chips, a packaging plant and a research and development lab, all in Taylor, Texas, according to Commerce Secretary Gina Raimondo.
Additionally, Samsung will expand its existing facility in Austin, Texas, to produce critical chips for aerospace, defense and automotive applications.
According to a senior US official, Samsung’s (OTCPK:SSNLF) total investment in the United States will be more than doubled from $17 billion to $45 billion, and the first factory will begin production in 2026, followed by the research and development and the second factory in 2027.
The Commerce Department awarded similar grants of $8.5 billion to Intel (INTC) and $6.6 billion to Taiwan Semiconductor Manufacturing (TSM) as part of the CHIPS and Science Act. A total of $39 billion are were allocated to chip manufacturers under the CHIPS Act, of which $23.2 billion has been allocated so far.
Both Intel (INTC) and Taiwan Semiconductor Manufacturing (TSM) have obtained $11 billion in loans and about $5 billion from the Commerce Department to subsidize chip production.