Samsung gets US$6.4 billion from CHIPS Act, promises to bring HBM and advanced packaging to Texas

Judy Lin, DIGITIMES Asia, Taipei 0

Samsung's Austin TX site. Credit: Samsung

The US Department of Commerce (DOC) and Samsung Electronics signed a non-binding preliminary memorandum of terms (PMT) on April 15 to provide up to US$6.4 billion in direct funding under the CHIPS and Science Act. Samsung is expected to invest more than $40 billion in central Texas in the coming years, including HBM and 2.5D packaging capacities.

The DOC press release said 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.

"I signed the CHIPS and Science Act to restore US leadership in semiconductor manufacturing and ensure America's consumers, businesses, and military maintain access to the chips that underpin our modern technology," said US President Joe Biden. "This announcement will unleash over $40 billion in investment from Samsung, and cement central Texas's role as a state-of-the-art semiconductor ecosystem, creating at least 21,500 jobs and leveraging up to $40 million in CHIPS funding to train and develop the local workforce."

"We're not just expanding production facilities; we're strengthening the local semiconductor ecosystem and positioning the U.S. as a global semiconductor manufacturing destination," said Kye Hyun Kyung, President and CEO of the Device Solutions (DS) Division at Samsung Electronics. "To meet the expected surge in demand from US customers, for future products like AI chips, our fabs will be equipped for cutting-edge process technologies and help advance the security of the US semiconductor supply chain."

Nikkei Asia quoted a senior US official that Samsung will more than double its investment in the US to roughly $45 billion, from the previous $17 billion. Its first fab in Taylor, Texas, is slated to begin production in 2026, and the second in 2027. The official said the Samsung cluster there has already got more than 20 suppliers of Samsung signed up to move to the US.

The R&D facility is expected to open in 2027, and two dozen suppliers have indicated they will move to the US to collaborate on the new Samsung cluster.

In addition to the proposed direct funding of up to $6.4 billion, the company has indicated that it plans to claim the US Department of the Treasury's Investment Tax Credit, which is expected to cover up to 25% of qualified capital expenditures.

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 (HBM) and 2.5D packaging, both of which have critical artificial intelligence applications. The semiconductors 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.