Samsung Electronics Co. Ltd. has reached a preliminary agreement with the U.S. Commerce Department for a grant estimated at $6 billion to expand beyond its current Austin operations and the massive semiconductor foundry under construction in Taylor, reports Bloomberg News.
Citing sources “familiar with the matter,” the news organization said Commerce officials are expected to announce in the next few weeks several large grants for semiconductor manufacturers to expand in the U.S.
The money is part of the 2022 CHIPS and Science Act, which has about $39 billion for grants to companies such as South Korea-based Samsung, its large competitor Taiwan Semiconductor Manufacturing Co. and U.S.-based Intel.
The act is designed to preserve national security by ensuring a supply of advanced chips made on U.S. soil for consumer electronics, automotive, military materiel makers and numerous other industries.
The Taiwanese TSMC is expected to receive about $5 billion from the federal government and Intel is said to be seeking about $10 billion in federal grants and loans, Bloomberg reports.
It is unclear if the money Samsung is expected to receive will be spent on additional fabrication plants on the 1,260-acre Taylor site, on the raw land that makes up a good part of the 650-acre campus of Samsung Austin Semiconductor about 15 miles away on Parmer Lane or outside the area entirely.
A spokesperson for Samsung Austin Semiconductor told the Taylor Press that because the latest information came out of the Commerce Department, the company could not comment.
Samsung is already receiving tax breaks from the Taylor Independent School District, Williamson County and the city of Taylor for its $17 billion foundry.
Although the law allowing for the special tax breaks expired, Samsung filed for and received approval of all three governing bodies before the cutoff to receive tax deals on future expansions.
In all, the agreements are in place for up to another nine fabrication plants on the Taylor site into the mid-2040s and another two at the Austin site. They will only be enacted if the South Korean company decides to expand at those locations.
Texas also is making additional investments in the state’s dominance in U.S. semiconductor manufacturing. Last year, the Legislature approved a $1.4 billion CHIPS Act of its own to ensure the state’s place in the industry.
On Tuesday, Gov. Greg Abbott and Texas House Speaker Dade Phelan introduced the appointed members of the new Texas Semiconductor Innovation Consortium Executive Committee at a news conference held at the University of Texas at Dallas.
“We will leverage the expertise of industry leaders and our world-class higher education institutions to ensure we not only remain the best state in America for semiconductors, but we become a global leader for semiconductor innovation,” Abbott said.
The Texas funding and the oversight of academic and semiconductor industry leaders in the consortium committee will ensure that Texas “will continue to dominate in the semiconductor industry for years to come,” Abbott said.
One local member of the committee is Cedar Park’s Jeffrey M. Smith, vice president of Infra Technology at Samsung Austin Semiconductor.
Samsung’s Taylor project is the largest single largest foreign investment in the state’s history.
Samsung officials say plant will be operational by the end of the year, but reports over the last few months indicated there are delays that will push full operational status into 2025 and that costs could exceed original estimates of $17 billion.
