Samsung Secures $6.4B CHIPS Funding Commitment for Central Texas Semiconductor Manufacturing Sites

by Hayden Spiess

AUSTIN AND TAYLOR, TEXAS — South Korea-based Samsung Electronics will receive up to $6.4 billion in direct funding under the CHIPS and Science Act for multiple projects at two separate locations in Central Texas. The U.S. Department of Commerce has signed a non-binding preliminary memorandum of terms (PMT) with the tech giant, which now plans to increase its investment in the state of Texas to $40 billion. 

Funding will be used for the development of new facilities in Taylor — roughly 35 miles northeast of Austin — as well as for the expansion of Samsung’s existing Austin facility. The proposed investment is expected to support the creation of more than 20,000 jobs, including 4,500 manufacturing positions.

Samsung, which has been manufacturing computer chips in the United States since 1996, previously announced plans for the Taylor facilities and an investment of $17 billion in November 2021. The company also plans to claim the Department of the Treasury’s investment tax credit, which is expected to cover up to 25 percent of qualified capital expenditures. 

In Taylor, the manufacturing site will include two fabrication plants, a research-and-development (R&D) facility focused on the development and research of new technology and an advanced packaging facility producing 3D high bandwidth memory and 2.5D packaging.

The New York Times reports that the first manufacturing facility will open in 2026, with the second plant scheduled to open in 2027, along with the R&D facility. The advanced packaging facility is planned to open in 2028.

Plans in Austin include the expansion of the existing, 30-year-old facility to support the production of fully depleted silicon-on-insulator (FD-SOI) process technologies for industries including aerospace, defense and automotive. 

Commitments to collaborate with the US Department of Defense are also included in the investment proposal for the Austin site. According to The New York Times, federal officials view domestic semiconductor manufacturing capabilities as having significant implications for national security, as the components are necessary to power missiles, satellites and fighter jets. 

The Biden Administration signed the CHIPS Act into law in 2022 to “restore US leadership in semiconductor manufacturing.” According to The White House, the United States is on track to produce 20 percent of the world’s leading-edge semiconductors by 2030.

The Samsung announcement comes on the heels of a similar announcement last week from Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), another chipmaker that entered into a PMT with the U.S. Department of Commerce for CHIPS funding at its TSMC Arizona campus.

Samsung will use about $40 million in CHIPS funding to train and develop the local workforce, according to a statement from President Joe Biden.

Hayden Spiess

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