The U.S. Department of Commerce and Samsung Electronics (Samsung) have signed a non-binding preliminary memorandum of terms (PMT) to provide up to $6.4 billion in direct funding under the CHIPS and Science Act to strengthen the resilience of the U.S. semiconductor supply chain, advance U.S. technology leadership, and fuel U.S. global competitiveness. Samsung – the only leading-edge semiconductor company that is a leader in both advanced memory and advanced logic technologies – is expected to invest more than $40 billion dollars in the region in the coming years, and the proposed investment would support the creation of over 20,000 jobs.
The proposed investment would turn Samsung’s existing presence in Texas into a comprehensive ecosystem for the development and production of leading-edge chips in the United States, including two new leading-edge logic fabs, an R&D fab, and an advanced packaging facility in Taylor, as well as an expansion to their existing Austin facility. It also demonstrates Samsung’s ongoing commitment to the United States, where it has been manufacturing chips since 1996. By continuing to develop the technologies of the future in the United States, Samsung is taking steps that would work towards strengthening U.S. economic and national security and increasing the resilience of both the U.S. and global semiconductor supply chains. Because of investments like Samsung’s, the United States is projected to be on track to produce roughly 20 percent of the world’s leading-edge logic chips by 2030.
The proposed CHIPS investment in Samsung would propel Central Texas into a state-of-the-art leading-edge ecosystem, creating over 17,000 construction jobs and more than 4,500 good-paying manufacturing jobs within the next five years, while stimulating regional commercial growth, leveraging the robust two-year and four-year academic footprint in the state to produce the skilled workers needed to fill the critical roles created by the proposed investment. With these proposed investments and the formation of this ecosystem, CHIPS for America would be helping to deliver on the CHIPS Vision for Success and contributing to the development of the local communities across Central Texas.
The proposed investment would be split across multiple projects at two separate locations in Central Texas:
- Taylor, Texas: Construct a comprehensive advanced manufacturing ecosystem, ranging from leading-edge logic to advanced packaging to R&D, transforming the small municipality of Taylor into an expansive hub of leading-edge semiconductor manufacturing. This ecosystem would include two leading-edge logic foundry fabs focused on mass production of 4nm and 2nm process technologies, an R&D fab dedicated to development and research on technology generations ahead of nodes currently in production, and an advanced packaging facility producing 3D High Bandwidth Memory and 2.5D packaging, both of which have critical artificial intelligence applications. The semiconductors that are designed and manufactured in this ecosystem would serve a wide variety of end markets – from communications, automotive, and defense industries to high-performance computing and artificial intelligence.
- Austin, Texas: Expand a facility that has been an economic engine for Central Texas for nearly 30 years. This proposed investment would expand the existing facilities to support the production of leading fully depleted silicon-on-insulator (FD-SOI) process technologies for critical U.S. industries, including aerospace, defense, and automotive. This proposed investment also includes commitments to collaborate with the U.S. Department of Defense.
In addition to the proposed direct funding of up to $6.4 billion, the company has indicated that it plans to claim the U.S. Department of the Treasury’s Investment Tax Credit, which is expected to cover up to 25 percent of qualified capital expenditures.
As explained in its first Notice of Funding Opportunity, the Department may offer applicants a PMT on a non-binding basis after satisfactory completion of the merit review of a full application. The PMT outlines key terms for a CHIPS incentives award, including the amount and form of the award. The award amounts are subject to due diligence and negotiation of a long-form term sheet and award documents and are conditional on the achievement of certain milestones. After the PMT is signed, the Department begins a comprehensive due diligence process on the proposed projects and continues negotiating or refining certain terms with the applicant.
