US Awards $6.4 Billion To Samsung And $6.6 Billion To TSMC In Grants To Boost US Chip Fabs

Just under a month ago we reported that tech conglomerate Intel received almost $20 billion in awards from the US government to grow its chip business.

This included $8.5 billion in direct funding through the country’s CHIPS and Science Act, which aims to boost semiconductor manufacturing and research and development capabilities in the US.

Ahead of this, Intel found itself eligible for federal loans up to $11 billion, which would take its total funding from grants and loans up to $19.5 billion.

The benefit to the US came in the form of Intel drawing plans of investing over $100 billion in commercial semiconductor projects across the US over the next five years.

Now, as the US looks to foster further development of the sector in the country, it awarded more grants and other benefits to two more leaders in the semiconductor race; Samsung and TSMC.

So, what did the announcements comprise of, what would the companies get from the US government and what would it bring to the country? Let’s explore!
 

How Did Samsung Benefit?

 

• In a news release published on Samsung’s website, the company revealed that it had welcomed Gina Raimondo to an event at its new semiconductor manufacturing facility in Taylor, Texas.

• Here Raimondo announced the US government was awarding Samsung up to $6.4 billion in direct funding as part of the CHIPS and Science Act, which was also followed by an official press release by the US government, which mentioned the two had signed a non-binding preliminary memorandum of terms (PMT).

• The investment will help Samsung grow its presence in Central Texas, boost manufacturing capacity and produce essential chips for automotive, consumer technology, IoT, aerospace and other industries.

• As per the announcement, the grant will be split between multiple projects at two separate locations in Central Texas, which includes “two new leading-edge logic fabs, an R&D fab, and an advanced packaging facility in Taylor, as well as an expansion to their existing Austin facility.”

• Since 1996, Samsung has invested over $18 billion in operating two fabs in Austin, Texas, which made it one of the largest direct foreign investments in United States history.

• This was followed by an announcement in 2021, where Samsung said it would invest a minimum of $17 billion as it expanded to Taylor, Texas with a new semiconductor manufacturing facility.

• With this investment, Samsung is expected to increase its investment to over $40 billion in the coming years, while adding more than 20,000 jobs.

• US President, Joe Biden, said, “This announcement will unleash over $40 billion in investment from Samsung, and cement central Texas’s role as a state-of-the-art semiconductor ecosystem, creating at least 21,500 jobs and leveraging up to $40 million in CHIPS funding to train and develop the local workforce.”

• Gina Raimondo, US Secretary of Commerce, said, “The chips that Samsung will be making in Texas are important components to our most advanced technologies, from artificial intelligence to high-performance computing and 5G communications. With President Biden’s leadership and Samsung’s commitment to the U.S., this proposed funding advances America’s leadership in semiconductor manufacturing on the world stage.”

• Kye Hyun Kyung, CEO, Samsung Semiconductor, said, “We’re not just expanding production facilities; we’re strengthening the local semiconductor ecosystem and positioning the US as a global semiconductor manufacturing destination.”

• [Contd.] “To meet the expected surge in demand from US customers, for future products like AI chips, our fabs will be equipped for cutting-edge process technologies and help bring security to the US semiconductor supply chain.”

 

How Did TSMC Benefit?

 

• Around ten days ago, on April 8, 2024, TSMC and the US government announced that the US Department of Commerce and TSMC Arizona Corporation, a subsidiary of Taiwan Semiconductor Manufacturing Company Limited (TSMC), have signed a non-binding preliminary memorandum of terms (PMT).

• The deal will see TSMC receive up to $6.6 billion in direct funding under the CHIPS and Science Act and will be used to support TSMC’s investment of over $65 billion in three greenfield leading-edge fabs in Phoenix, Arizona.

• The agreement also makes TSMC eligible for loans of up to US$5 billion.

• TSMC also announced plans to build a third fab at TSMC Arizona, through which the company is expected to create around 6,000 direct high-tech, high-wage jobs, more than 20,000 accumulated unique construction jobs and tens of thousands of indirect supplier and consumer jobs.

• These fabs will help TSMC manufacture the world’s most advanced semiconductors.

• As per TSMC’s news release, its first fab is due to begin production using 4nm technology in the first half of 2025.

• The second fab will produce the world’s most advanced 2nm process technology and 3nm technology, with production beginning in 2028.

• The third fab will produce chips using 2nm or more advanced processes, with production beginning before 2030.

• US President, Joe Biden, said, “TSMC’s renewed commitment to the United States, and its investment in Arizona represent a broader story for semiconductor manufacturing that’s made in America and with the strong support of America’s leading technology firms to build the products we rely on every day.”

• Gina Raimondo, US Secretary of Commerce, said, “The leading-edge semiconductors that will be made here in Arizona are foundational to the technology that will define global economic and national security in the 21st century, including AI and high-performance computing.”

• Dr. Mark Liu, Chairman, TSMC, said, “The CHIPS and Science Act provides TSMC the opportunity to make this unprecedented investment and to offer our foundry service of the most advanced manufacturing technologies in the United States.”

• [Contd.] “Our U.S. operations allow us to better support our U.S. customers, which include several of the world’s leading technology companies. Our U.S. operations will also expand our capability to trailblaze future advancements in semiconductor technology.”

Do you think these grants will help the US boost its chip production capabilities and take the lead in the semiconductor industry?

Let us know in the comments below!