Apr 15, 2024 - Technology

Biden admin announces $6.4B for Samsung to expand chip production in Texas

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An American, South Korean, Texas, and Samsung flag fly in front of construction at the Samsung Austin semiconductor plant in Taylor, Texas.

Construction at the Samsung Austin semiconductor plant in Taylor, Texas, in November. Photo: Aaron E. Martinez/Austin American-Statesman via Reuters

President Biden on Monday morning announced up to $6.4 billion in grants to Samsung for the South Korean company to expand chip production in the Austin area.

Why it matters: The massive Biden-led investment in chip production aims to reduce dependence on China and Taiwan, and gives the administration a permanent legacy across the U.S.

What they're saying: The preliminary agreement with the Commerce Department "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," the White House announcement said.

Thought bubble, via Axios managing editor for technology Scott Rosenberg: The moves aim to strengthen domestic chip production as a strategic defense against disruption in the global supply chain, which is heavily dependent on Taiwan. The U.S. wants to make sure chips keep flowing in the event of a Chinese assault on the island or an earthquake or other natural disaster.

Zoom in: The agreement includes an existing site in Austin and a new chip manufacturing hub nearby in Taylor, Texas.

  • "The proposed investment would turn Samsung's existing presence in Texas into a comprehensive ecosystem for the development and production of leading-edge chips in the United States," the Commerce Department said.
  • That will include "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," per the announcement.

Thought bubble, via Axios Austin's Asher Price: With the Taylor announcement, the prosperity that Austin has enjoyed as a semiconductor hub appears poised to spill out into a small-town Texas satellite.

  • Spending money on chip manufacturing in Central Texas is also one of the few areas of agreement for Texas' Republican Gov. Greg Abbott and the Biden administration.

Catch up quick: Last month, Biden announced $20 billion in funding for Intel to expand semiconductor production in several states, including Arizona, Ohio and New Mexico.

  • Biden's CHIPS and Science Act is also providing up to $6.6 billion for the Taiwan Semiconductor Manufacturing Company to expand manufacturing in Phoenix.
  • Samsung is the number two manufacturer of chips globally after TSMC.
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