Samsung Electronics is getting ready to unveil a US$44 billion (RM209.79 billion) investment in US chipmaking as early as next week. This project is a centrepiece of Washington’s larger initiative to return semiconductor manufacturing to the US.
TakeAway Points:
- The multinational company is planning to wrap up a US$44 billion (RM209.79 billion) investment in US chipmaking in the coming week.
- The award is the latest in a spate of multibillion-dollar handouts from the Biden administration, which is using the 2022 Chips and Science Act to try and revitalise American chipmaking after decades of production shifting to Asia.
- Samsung and the Commerce Department will work out the specifics of their agreement over a due diligence period that will last for several months, starting with the announcement next week.
Samsung’s $44 Billion InvestmentÂ
The largest memory chip manufacturer in the world is to present the concept to Commerce Secretary Gina Raimondo in Taylor, Texas, according to individuals with knowledge of the situation. According to the people, it has obtained more than US$6 billion in government funds for an investment that has grown to a total of US$44 billion over several years. According to the people who asked not to be named, the announcement’s timing and specifics could yet alter before they are finalised.Â
The award is the latest in a spate of multibillion-dollar handouts from the Biden administration, which is using the 2022 Chips and Science Act to try and revitalise American chipmaking after decades of production shifting to Asia. The broader programme is also intended to counter the technological rise of China, which is building up its own domestic semiconductor industry.
The Chips Act
The Chips Act, which set aside US$39 billion in grants plus US$75 billion in loans and guarantees, has spurred well north of US$200 billion in private semiconductor investments. Intel Corp. snagged nearly US$20 billion in grants and loans. Taiwan Semiconductor Manufacturing Co., the main chipmaker for Nvidia Corp. and Apple Inc., got US$11.6 billion. It’s unclear if Samsung will get loan awards on top of the US$6 billion plus in government grants.
Samsung’s project adds to a robust semiconductor ecosystem in Texas, including tens of billions of dollars of additional investment from Texas Instruments Inc in its home state and Samsung’s existing factory in Austin. It’s not clear when the Taylor site will begin mass production, after a reported delay last year. Representatives of the company declined to comment.
The announcement next week will set off a months-long due diligence period, during which Samsung and the Commerce Department will hammer out the final terms of their agreement. The money will then be disbursed as the project hits key construction and production milestones, with the potential for clawbacks if the firm falls short of its promise.
About
Samsung Electronics is a multinational firm specialising in consumer electronics and appliances, based in Yeongtong-gu, Suwon, South Korea. At 70% of the group’s income in 2012, it represents the apex of the Samsung chaebol.Â
Samsung Electronics has played a significant role in the corporate governance of the group due to its numerous ownerships. Samsung Electronics employs about 270,000 people and runs assembly lines and sales networks in 74 nations. Investors from abroad make up the majority of its stockholders. As of 2019, Samsung Electronics ranks 12th globally with a market valuation of US$520.65 billion, making it the second-largest technology company in the world by revenue.
