Samsung headquarters in Seoul’s Seocho district (Image courtesy of Yonhap)
SEOUL, Apr. 16 (Korea Bizwire) — Samsung Electronics Co. is set to accelerate the expansion of its global semiconductor supply chain in the era of artificial intelligence (AI), following a subsidy of US$6.4 billion from the U.S. government and its extended investment plan.
Under the Biden Administration’s announcement, the South Korean chipmaker was to receive up to $6.4 billion in grants under the 2022 CHIPS and Science Act, aimed at bolstering U.S. semiconductor production to 20 percent of the world’s leading-edge chips by the end of the decade.
The funding will support Samsung Electronics’ chip production facilities in Taylor and Austin, Texas, alongside other research centers and packaging facilities.
This positions Samsung Electronics as the third-largest beneficiary of the U.S. CHIPS Act program, following Intel Corp. with up to $8.5 billion in grants and $11 billion in loans, and Taiwan’s TSMC with up to $6.6 billion in grants and about $5 billion in loans.
At the same time, Samsung Electronics will increase its investment in its semiconductor plants in Texas to more than $40 billion from $17 billion.
This image provided by Samsung Electronics Co. shows its latest HBM3E 12H chips. (Image courtesy of Yonhap)
The additional investment will include the construction of one more semiconductor production facility in addition to the existing plant in Taylor, as well as advanced packaging and research and development (R&D) facilities.
Experts pointed out Samsung Electronics’ production capabilities as a world-leading semiconductor producer and commitment to U.S. investment have led to the third-biggest subsidy deal with Washington.
“Samsung Electronics seems to have been evaluated better than its competitors by the U.S. government in terms of its future investment plans, scale and company value,” Kim Yang-paeng, a researcher at the Korea Institute of Industrial Economics and Trade, said.
“The U.S. grants will help the company reduce the amount of its own money used to invest directly in overseas expansion. It’s good for Samsung Electronics,” he added.
It will be also possible for the South Korean chipmaker to expand participation in the advanced semiconductor supply chain through local production in the United States, where global big tech companies are located.
Samsung Electronics Co.’s semiconductor facilities in Austin, Texas, in this photo provided by the company (Image courtesy of Yonhap)
Samsung Electronics, the world’s biggest memory chip manufacturer, has participated in U.S. chip production since the late 1990s, as it has invested a combined $18 billion in operating two fabs in Austin.
The company said it will do its best to strengthen the local semiconductor ecosystem in the U.S. and deal with booming demand for new high-performance AI chips like high bandwidth memory (HBM) amid the rise of applications such as generative AI, exemplified by models like ChatGPT.
In an announcement in February, Samsung Electronics developed the fifth-generation HBM chips with 12 layers of DRAM chips and the industry’s largest capacity of 36 gigabytes. Its mass production is slated for the first half of the year.
“We’re not just expanding production facilities, we’re strengthening the local semiconductor ecosystem and positioning the U.S. as a global semiconductor manufacturing destination,” Kyung Kye-hyun, CEO and head of semiconductor business at Samsung Electronics, said after the U.S. government’s announcement in Taylor.
“To meet the expected surge in demand from U.S. customers, for future products like AI chips, our fabs will be equipped for cutting-edge process technologies and help bring security to the U.S. semiconductor supply chain,” he said.
While Samsung Electronics takes center stage in U.S. semiconductor expansion, its South Korean rival SK hynix Inc. is also rolling up its sleeves to join the U.S. government’s plans to attract the chipmaking supply chain to home.
Earlier this month, SK hynix announced a $3.87 billion investment plan to build an advanced packaging fabrication and R&D facility in West Lafayette, Indiana.
(Yonhap)
