Next week, the Biden administration is expected to announce a major initiative to support local chip manufacturing—an award of more than $6 billion to Samsung Electronics.
Samsung had previously proposed the $17 billion chip manufacturing factory in 2021. It is one of the four facilities in Taylor that will be built with the subsidy, which Commerce Department Secretary Gina Raimondo is expected to disclose. The investment will support a research and development center, a sophisticated packaging facility, and an additional factory. Samsung’s plan to increase its U.S. investment to over $44 billion demonstrates its commitment to this partnership.
The statement reflects the US desire to strengthen its semiconductor sector and continues a recent trend of large expenditures in homegrown chip fabrication. The government intends to increase its semiconductor output with Congress’s approval of the Chips and Science Act in 2022, which provides significant subsidies for research and manufacture totaling $52.7 billion. Considering the United States’ share of global semiconductor production has decreased, this legislative push consistently reduces dependency on overseas manufacturers.
Despite the Biden administration’s efforts to support domestic chip manufacturing, the president’s failure to attend the inaugurating ceremony highlights the initiative’s political sensitivity. President Biden’s choice to abstain from the event reflects a careful approach to avoid possible issues during a brutal reelection campaign. The endeavor is nonpartisan, as seen by the invitation extended to Republican Texas Governor Greg Abbott.
Increasing local manufacturing capacity is essential, as seen by chip production growth by businesses like Intel and Samsung, who recently obtained a $8.5 billion subsidy for their semiconductor manufacture in the United States. Although TSMC and Intel are increasing production in Arizona, Samsung’s decision to grow in Texas indicates a distinct political climate.
Despite Texas’ reputation as a firmly Republican state, there is less expectation that the move will impact the electoral scenery than in Arizona, a crucial swing state.
The Biden administration’s subsidies to Samsung are vital to expanding domestic semiconductor production. The initiative aims to improve the U.S. semiconductor industry through intelligent partnerships and significant investments while navigating the political challenges presented by the next election.
