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Samsung plans to expand chip supply chain following $6.4 billion US grant

Samsung, a South Korean chipmaker, is set to accelerate its global semiconductor supply chain expansion in the era of artificial intelligence following a subsidy of $6.4 billion from the US government and an extended investment plan. The Biden Administration’s announcement includes grants under the 2022 CHIPS and Science Act to bolster US semiconductor production to 20 per cent 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, making Samsung the third-largest beneficiary of the US CHIPS Act program behind Intel and Taiwan’s TSMC. Samsung will increase its investment in semiconductor plants in Texas to over $40 billion from $17 billion, including the construction of a new semiconductor production facility in Taylor, advanced packaging, and research and development facilities.

Experts noted Samsung’s world-leading semiconductor production capabilities and commitment to US investment, leading to the third-biggest subsidy deal with Washington. Kim Yang-paeng, a researcher at the Korea Institute of Industrial Economics and Trade, stated, “Samsung Electronics seems to have been evaluated better than its competitors by the US government in terms of its future investment plans, scale, and company value.”

The grants will help Samsung reduce the amount of its own money used for overseas expansion and expand its participation in the advanced semiconductor supply chain through local production in the United States. This move will benefit Samsung Electronics and allow them to establish a stronger presence in the market where global tech giants are located, further solidifying their position as a leading semiconductor producer.

IANS

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