U.S. to award Samsung up to $6.6 billion chip subsidy for Texas expansion, sources say

The Biden administration plans to announce that it is awarding more than $6 billion to South Korea's Samsung next week to expand its chip output in Taylor, Texas, as it seeks to ramp up chipmaking in the U.S., two people familiar with the matter said.

The subsidy, which will be unveiled by Commerce Department Secretary Gina Raimondo, will go toward constructing four facilities in Taylor, including one $17 billion chipmaking plant that Samsung announced in 2021, another factory, an advanced packaging facility and a research and development center, one of the sources said.

It will also include an investment in another undisclosed location, the source said, adding that Samsung will more than double its U.S. investment to over $44 billion as part of the deal.

The Commerce Department and Samsung declined to comment. Texas Governor Greg Abbott's office did not respond to requests for comment.

One of the sources said it would be the third-largest of the program, just behind Taiwan's TSMC, which was awarded $6.6 billion on Monday and agreed to expand its investment by $25 billion to $65 billion and to add a third Arizona factory by 2030.

The announcement will cap off a string of major Chips and Science grants in quick succession as the U.S. seeks to expand domestic chip production and lure away capital that might have been used to build plants in China and the region.

In 2022, Congress approved the Chips and Science Act to boost domestic semiconductor output with $52.7 billion in research and manufacturing subsidies. Lawmakers also approved $75 billion in government loan authority, but one of the sources said Samsung plans to take no loans.

(With input from Reuters)