US to grant Samsung up to $6.4b for chip plants

WASHINGTON: The United States on Monday announced grants of up to $6.4 billion to South Korean semiconductor giant Samsung to produce cuting-edge chips in Texas.

The award is the latest from the US government as it looks to revive the country’s chip manufacturing industry, especially high-end semiconductors.

President Joe Biden’s administration has previously approved billions in grants to US titan Intel and Taiwan’s TSMC, as it tries to avoid the prospect of shortages of semiconductors -- the lifeblood of the modern global economy.

“The us department of commerce and samsung Electronics (Samsung) have signed a non-binding preliminary memorandum of terms (PMT) to provide up to $6.4 billion in direct funding under the CHIPS and Science Act,” said a statement published by the Department of Commerce.

Samsung “is expected to invest more than $40 billion in the region in the coming years, and the proposed investment would support the creation of over 20,000 jobs,” it added.

Currently, the United States is highly dependent on Asia for chips and is vulnerable to shocks to semiconductor supply chains, especially during geo political crises that impact places such as taiwan.

The Samsung agreement will “cement central Texas’s role as a state-of-the-art semiconductor ecosystem,” Biden said in a statement.

“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.”