The Administration announced that the U.S. Department of Commerce and Samsung Electronics have signed a non-binding preliminary memorandum of terms (PMT) to provide up to $6.4 billion in direct funding under the CHIPS and Science Act to build semiconductor plants in Central Texas. The point is to strengthen the resilience of the U.S. semiconductor supply chain, advance U.S. technology leadership, and fuel U.S. global competitiveness, according to the Administration.
As part of the deal, Samsung is expected to invest more than $40 billion dollars in the region in the coming years, and says the proposed investment would support the creation of over 20,000 jobs. The company will use the money to upgrade a chip factory that’s already under construction in Taylor, TX.
It will also build a second factory by the end of the decade and add a new research and development center. Samsung will also build an “advanced packaging” facility — a specialized factory that puts together different chips and electronic components to make them ready to go into cars, planes, phones and thousands of other machines and devices, according to The Washington Post.
Samsung has been manufacturing chips in the U.S. since 1996. By continuing to develop the technologies of the future in the United States, Samsung is taking steps that would work towards strengthening U.S. economic and national security and increasing the resilience of both the U.S. and global semiconductor supply chains, according to the Administration. The federal government says due to investments like Samsung’s, the United States is projected to be on track to produce roughly 20 percent of the world’s chips by 2030.
The deal with Samsung comes a week after the government announced a $6.6 billion subsidy for Taiwan Semiconductor Manufacturing Co., or TSMC, to expand its operations in Arizona, Inside Towers reported.
The payments are part of the 2022 CHIPS Act, which includes $39 billion in subsidies to encourage U.S. and foreign companies to build in the United States. So far, the government has allotted around $23 billion of that money to a handful of companies.
As explained in its first Notice of Funding Opportunity, the Department may offer applicants a PMT on a non-binding basis after satisfactory completion of the merit review of a full application. After the PMT is signed, the Department begins a due diligence process on the proposed projects and continues negotiating or refining certain terms with the applicant.
By Leslie Stimson, Inside Towers Washington Bureau Chief
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