Samsung Electronics to Expand With $6 Billion US Subsidy

Friday, March 15, 2024 5:48 AM UTC

Samsung Electronics is set to receive over $6 billion in U.S. subsidy, aiming to bolster its presence in chip manufacturing. This substantial financial support is expected to drive the Korean chipmaker's venture beyond its current project in Taylor, Texas, as reported by Bloomberg from undisclosed sources.

U.S. Commerce Department's Support

According to Korea Joongang Daily, the U.S. Commerce Department is anticipated to unveil this significant funding in the upcoming weeks. Alongside Samsung, other chipmakers like Taiwan's TSMC are speculated to benefit from grants, with TSMC possibly receiving a $5 billion reward.

Samsung's Continued Investments

Upon the announcement of federal funding, Samsung Electronics is projected to make further investments in the U.S. As per media reports, the company refrained from commenting on this matter.

Intel is also in line for substantial funding, with reports suggesting a support package exceeding $10 billion. The awaited announcement is scheduled for the following week.

After commencing a $17 billion project in Taylor last year, Samsung Electronics has applied for tax breaks for an additional 11 chip plants. These investments are part of a comprehensive $192 billion plan over the next two decades, forming a strategic long-term vision for the Korean chipmaker.

Impact of the U.S. CHIPS Act

Bloomberg noted that Samsung Electronics' grant is linked to the U.S. CHIPS Act, which aims to reshape the chip manufacturing supply chain in the United States. This initiative involves subsidizing chipmakers for $52.7 billion, including substantial direct grants of $39 billion.

Samsung's Taylor plant, initially slated for mass production by year-end, is now delayed until 2025. This setback is partly due to ongoing negotiations with the U.S. concerning subsidy distribution.

Despite the delay in the Taylor plant's production timeline, Samsung remains optimistic about its future in the U.S. market. The company is actively working to mitigate these delays through strategic planning and the potential acceleration of other projects within the country.

Photo: Rubaitul Azad /Unsplash