(NewsInsights.org) – President Joe Biden signed the CHIPS and Science Act into law in August 2022, vowing to revitalize US semiconductor manufacturing and reduce foreign dependence on critical supply chains. On Monday, April 15, the Commerce Department announced it inked a preliminary deal with Samsung, pledging up to $6.4 billion in CHIPS funds toward a more than $40 billion expansion of the company’s Texas semiconductor facilities.
In a White House statement, Biden explained he signed the legislation “to restore US leadership in semiconductor manufacturing and ensure America’s […] access to the chips that underpin our modern technology.” The president emphasized that private investment and CHIPS funding would work together to create “a state-of-the-art semiconductor ecosystem.”
Samsung Electronics is the latest company to reach an agreement with the Biden administration to receive billions in funding to build or expand existing semiconductor manufacturing sites across the U.S. https://t.co/hoIs3mnWvc
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Commerce Secretary Gina Raimondo said the Samsung agreement would create as many as 17,000 construction jobs in Texas. Samsung plans to upgrade an existing facility in Austin and build two new manufacturing plants, a research and development facility, and a packaging operation in nearby Taylor. She added that the new facilities could provide 4,500 new manufacturing jobs in the state.
Samsung’s current Austin facility primarily supplies critical components for US defense, aerospace, and automotive industries. The company has also committed to collaborating with the Department of Defense.
The first step in obtaining CHIPS funds is signing a non-binding preliminary memorandum of terms (PMT), which acts as an informal contract between a company and the government outlining terms and milestones the company must meet to obtain funding. Recent deals reached with Samsung, Taiwan Semiconductor Manufacturing Company (TSMC) for plants in Arizona, and Intel for facilities in New Mexico, Arizona, Oregon, and Ohio have put America on track to produce about 20% of global leading-edge semiconductors by 2030.
TSMC received a commitment for $6.6 billion in CHIPS funding toward an investment of more than $65 billion, while Intel signed a PMT for $8.5 billion in direct funding from the CHIPS Act toward private investments totaling over $100 billion to upgrade and build Intel facilities in four states. The two companies anticipate creating more than 16,000 new manufacturing jobs and as many as 40,000 construction jobs.
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