Samsung to receive over $6b subsidy from US: report

Samsung Electronics is set to receive between $6 billion and $7 billion in grants from the US government next week as the Korean chipmaker looks to bolster its US production, Reuters reported Monday.

According to the report citing anonymous sources, the subsidy from the Biden administration will be used for the construction of four semiconductor facilities in Taylor, Texas. The subsidy-impacted facilities are a $17 billion chipmaking plant Samsung announced in 2021, another chip factory, an advanced packaging facility and a research and development center.

Noting that the government grant, which will be announced by US Secretary of Commerce Gina Raimondo, will go toward investment in another undisclosed location, the report said Samsung will more than double its US investment to $44 billion as part of the deal with Washington, DC. It added that Samsung does not plan to take loans from the US government.

Samsung refrained from making comments on the report.

There have been subsidy speculations about Samsung as Bloomberg reported last month that the US is poised to grant the Korean chipmaker subsidies exceeding $6 billion, citing several unnamed sources.

Reuters pointed out that the subsidy would be the third biggest of the government grant under the Chips and Science Act, which was approved by the US Congress in 2022 to bolster domestic semiconductor chip output with $52.7 billion in research and manufacturing subsidies and $75 billion in government loans.

The Biden administration announced a plan Monday to award $6.6 billion to Taiwan Semiconductor Manufacturing Company. In turn, TSMC agreed to increase its US investment by $25 billion to reach $65 billion in total and build a third Arizona factory by 2030.

The Biden administration last month pledged $8.5 billion in subsidies and $11 billion in loans to US chipmaker Intel, giving a boost to the homegrown semiconductor company.

The US has reiterated its determination to bring up its share of global advanced chip production to 20 percent by 2030 through the subsidy program. According to the Semiconductor Industry Association, the share of global semiconductor manufacturing capacity in the US has dipped to 12 percent in 2020 from 37 percent in 1990.

Regarding the series of subsidy announcements for the chipmakers, Reuters said that unlike TSMC and Intel expanding production in the key swing state of Arizona, Samsung’s enlarged investment in Texas, a traditionally Republican state, appears to be less likely to help Biden for the upcoming presidential election.