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Samsung’s Texas Chip Factory: A $7 Billion Vote of Confidence from U.S. Government

Daniel Kim Views  

Samsung Electronics is building a foundry factory in Taylor, Texas, reportedly receiving up to $7 billion in subsidies from the U.S. government.

On the 8th (local time), Reuters reported, citing sources, that the U.S. government will announce a subsidy of $6 to $7 billion for Samsung Electronics next week under the semiconductor support law. One source said that the scale of Samsung’s subsidy will be the third largest after U.S. Intel and Taiwan’s TSMC. Intel and TSMC have agreed to receive subsidies of $8.5 billion and $6.6 billion, respectively.

This report drew more attention as it came out right after TSMC’s U.S. subsidy was confirmed. The U.S. government has agreed to provide TSMC with subsidies and a low-interest loan of $5 billion. This is massive support for a total of $11.6 billion.

In response to the U.S. government’s support, TSMC has increased its U.S. investment by 62.5%, from $40 billion to $65 billion. It also decided to build one more factory in Arizona, making three total. TSMC is constructing two factories in Phoenix, Arizona, with an investment of $40 billion.

Samsung Electronics also seems to be increasing its U.S. investment. The source said that Samsung will increase its U.S. investment to at least $44 billion, more than double the original amount. This includes investment in a new semiconductor factory, packaging facilities, and R&D centers in Taylor, Texas, as well as in undisclosed locations.

Samsung Electronics is investing $17 billion to build a semiconductor factory in Taylor, Texas. The Wall Street Journal (WSJ) reported on the 5th that Samsung will announce an investment plan of $44 billion on the 15th.

The ratio of TSMC’s investment to subsidy is 10.15%. If Samsung invests $44 billion in the U.S., it will be $21 billion less than TSMC’s investment. Therefore, it is still uncertain what level of subsidy the U.S. government will set.

The Department of Commerce and Samsung Electronics did not comment on Reuters’ report.

Meanwhile, Bloomberg reported that following Samsung Electronics, U.S. semiconductor company Micron is also expected to receive billions of dollars in support within the order.

Daniel Kim
content@viewusglobal.com

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