May 25, 2024
Samsung Receives $6.4 Billion Grant for Texas Chip Manufacturing Expansion
Policy & Regulation

Samsung Receives $6.4 Billion Grant for Texas Chip Manufacturing Expansion

Samsung will receive $6.4 billion in grants from the United States government to expand its chip manufacturing operations in Texas.

The South Korean manufacturing conglomerate secured the grants as part of a broader effort to enhance chip manufacturing in the United States.

Funding from the Chips and Science Act

The funding will come from the 2022 Chips and Science Act, which aims to boost chip production for the automotive, aerospace, and defence industries.

The act’s goal is to strengthen national security, according to unnamed administration officials who spoke with Reuters in an April 15 report.

Supporting Production Facilities

The grants will support two production facilities, including a research centre and a packaging facility.

The funds will also allow Samsung to expand its semiconductor manufacturing facility in Austin, Texas. Commerce Secretary Gina Raimondo expressed optimism about the impact of the grants:

“[These grants] will allow the U.S. to once again lead the world, not just in semiconductor design, which is where we do now lead, but also in manufacturing, advanced packaging, and research and development.”

Samsung’s Investment in Texas

In addition to the grants, Samsung is expected to invest another $45 billion in the expansion of its Texas chip manufacturing facility by the end of 2030.

This expansion aligns with Samsung’s broader goals to solidify its position as a global leader in semiconductor manufacturing.

The news of Samsung’s expansion comes on the heels of reports about ChatGPT creator OpenAI potentially producing its semiconductor chips for its artificial intelligence (AI) applications.

OpenAI may receive funding from the United Arab Emirates state-backed group MGX for its chip production plans.

Chip Shortage Concerns

Chip shortages remain a pressing concern for Bitcoin miners ahead of the Bitcoin halving. In 2023, U.S. Bitcoin miner CleanSpark cited potential “cryptocurrency hardware disruption” and possible difficulties obtaining new hardware in its 10-K filing.

Riot Platforms outlined similar concerns in its 2023 annual report, noting the ongoing global supply chain crisis and increased demand for computer chips as key risks to Bitcoin mining profitability.

Samsung’s investment and the U.S. government’s support for chip manufacturing may help alleviate some of these concerns, providing a boost to the semiconductor industry and related sectors.

Image: Wallpaper Flare

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