In a significant move aimed at bolstering domestic semiconductor production, the U.S. government is reportedly set to provide Samsung Electronics Co. with over $6 billion to expand its chipmaking operations within the country.
What Happened:
According to sources familiar with the matter cited in a Bloomberg report on Thursday, the U.S. government is preparing to allocate more than $6 billion to Samsung. This funding will support the tech giant in expanding its chip production beyond a previously announced project in Texas.
The financial assistance, part of the 2022 Chips and Science Act, is anticipated to be one of several substantial grants announced by the Commerce Department in the coming weeks.
Additionally, sources indicate that Taiwan Semiconductor Manufacturing Co. (TSMC), Samsung’s Asian rival, is expected to receive a grant of over $5 billion as part of these government initiatives.
Why It Matters:
This funding represents a crucial step in the U.S. government’s strategy to strengthen domestic chip manufacturing capabilities amid a global semiconductor shortage. By investing in local production, the government aims to reduce reliance on foreign chip suppliers and ensure a stable semiconductor supply chain for various electronic devices.
For Samsung, the funding presents a significant opportunity to expand its presence in the U.S. semiconductor market. With plans to broaden operations beyond Texas, Samsung can accelerate its contribution to domestic chip production.
The grant to TSMC underscores the government’s commitment to fostering competition in the chipmaking industry. By supporting multiple manufacturers, the government seeks to drive innovation, improve chip technology, and potentially lower costs for consumers.
As of the time of writing, Samsung Electronics shares are trading at 73,600 won, down 700 won (0.94%) in Seoul.
