Samsung Poised to Win Over $6 Billion for Expanded US Investment
(Bloomberg) -- The US plans to award more than $6 billion to Samsung Electronics Co., helping the chipmaker expand beyond a project in Texas it has already announced, according to people familiar with the matter.
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The money from the 2022 Chips and Science Act would be one of several major awards that the Commerce Department is expected to announce in coming weeks, including a grant of more than $5 billion to Samsung’s Asian rival, Taiwan Semiconductor Manufacturing Co., people familiar with the plans said earlier. The people spoke on condition of anonymity in advance of the official announcements.
The federal funding for Samsung, South Korea’s leading chipmaker, would come alongside significant additional US investment by the firm, the people said. In 2021, the company announced a $17 billion project in Taylor, Texas, near an existing Samsung plant in Austin. It isn’t yet clear where the additional investment would be located.
The pending announcement only represents a preliminary agreement that could still change, and no final decision has been made. Samsung and the Commerce Department declined to comment, while the White House didn’t respond to a request for comment.
Read More: Ex-Bankers Help Divvy Up $100 Billion to Boost US Chipmaking
The Chips Act set aside $39 billion in direct grants — plus loans and loan guarantees valued at $75 billion — to persuade the world’s top semiconductor companies to make chips on American soil after decades of production abroad.
The Commerce Department earlier announced three Chips Act grants to producers of older-generation semiconductors. Officials have been negotiating for months with makers of cutting-edge chips that will fuel the artificial-intelligence boom, and have set aside about $28 billion for those advanced projects, Commerce Secretary Gina Raimondo has said.
Intel Corp. — the main American competitor to Samsung and TSMC — has been in talks for a Chips Act package of more than $10 billion spanning both grants and loans. Intel’s incentive deal is expected to be announced next week, one of the people said, with the other advanced chipmakers set to follow.
Earlier: US Aims to Announce Big Grants for Chip Plants by End of March
It isn’t clear whether companies beyond Intel are in line to receive loans or financing guarantees. Samsung has indicated that it isn’t interested in loans, according to people familiar with the matter.
There’s also the separate issue of $3.5 billion in Chips Act grants for production of military chips — money that’s expected to go to Intel and has thrown a wrench in negotiations over the past few weeks after the Pentagon pulled out from its portion of the funding.
Samsung previously said its Taylor site is slated to begin mass production this year, but that timeline is reportedly being delayed to 2025. Company officials have since said that they can’t confirm the mass production schedule.
Samsung has touted its economic impact on the Austin region, which rose to $26.8 billion in 2023 from $13.6 billion the year before, according to a third-party report the firm published last month.
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