Samsung Set To Expand Chips Supply Chain After $6.4 Bn US Grants

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Seoul: Samsung is set to accelerate the expansion of its global semiconductor supply chain in the era of artificial intelligence (AI), following a subsidy of $6.4 billion from the US government and its extended investment plan.

Under the Biden Administration's announcement, the South Korean chipmaker will receive up to $6.4 billion in grants under the 2022 CHIPS and Science Act, aimed at bolstering US semiconductor production to 20 per cent of the world's leading-edge chips by the end of the decade.

The funding will support Samsung Electronics' chip production facilities in Taylor and Austin, Texas, alongside other research centres and packaging facilities, reports Yonhap news agency.

This positions Samsung Electronics as the third-largest beneficiary of the US CHIPS Act programme, following Intel with up to $8.5 billion in grants and $11 billion in loans, and Taiwan's TSMC with up to $6.6 billion in grants and about $5 billion in loans.

At the same time, Samsung will increase its investment in its semiconductor plants in Texas to more than $40 billion from $17 billion. The additional investment will include the construction of one more semiconductor production facility in addition to the existing plant in Taylor, as well as advanced packaging and research and development (R&D) facilities.

Experts pointed out Samsung's production capabilities as a world-leading semiconductor producer and commitment to the US investment have led to the third-biggest subsidy deal with Washington.

"Samsung Electronics seems to have been evaluated better than its competitors by the US government in terms of its future investment plans, scale and company value," Kim Yang-paeng, a researcher at the Korea Institute of Industrial Economics and Trade, said.

"The US grants will help the company reduce the amount of its own money used to invest directly in overseas expansion. It's good for Samsung Electronics," he added.

It will also be possible for the South Korean chipmaker to expand participation in the advanced semiconductor supply chain through local production in the United States, where global big tech companies are located.