April 15, 2024
Today, the Biden-Harris Administration announced that 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% of the world’s leading-edge logic chips by 2030.
“I signed the CHIPS and Science Act to restore U.S. leadership in semiconductor manufacturing and ensure America’s consumers, businesses, and military maintain access to the chips that underpin our modern technology,” said President 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.”
“Thanks to President Biden’s CHIPS Act, Samsung is expected to invest more than $40 billion to build a cluster of semiconductor factories here in the U.S. that will employ thousands of workers in good-paying jobs, support a robust supplier ecosystem, and fuel innovation through R&D,” said U.S. Secretary of Commerce Gina Raimondo. “Proposed CHIPS investments like the ones we are announcing today will be a catalyst for continued private sector investments to help secure the long-term stability we need to put America at the beginning of our semiconductor supply chain and to safeguard a strong resilient ecosystem here at home. The chips that Samsung will be making in Texas are important components to our most advanced technologies, from artificial intelligence to high-performance computing and 5G communications. With President Biden’s leadership and Samsung’s commitment to the U.S., this proposed funding advances America’s leadership in semiconductor manufacturing on the world stage.”
President Biden signed the bipartisan CHIPS and Science Act to usher in a new era of semiconductor manufacturing in the United States, bringing with it a revitalized domestic supply chain, good-paying jobs, and investments in the industries of the future. 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.
“Semiconductor research and development is critical to building a robust and thriving semiconductor manufacturing industry in the United States,” said Under Secretary of Commerce for Standards and Technology and National Institute of Standards and Technology Director Laurie E. Locascio. “Samsung’s plans to build a cutting-edge R&D and advanced packaging facilities in Texas are shining examples of the types of R&D projects that will help build, and heavily contribute to, America’s chip manufacturing industry.”
“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 U.S. customers, for future products like AI chips, our fabs will be equipped for cutting-edge process technologies and help advance the security of the U.S. semiconductor supply chain.”
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.
Samsung has a proven record of workforce engagement in Texas, including robust partnerships with local education institutions — such as Austin Community College, The University of Texas at Austin, Texas A&M University, Texas State Technical College, Temple College, Manor High School and Taylor High School — to train its future semiconductor workforce. The proposed CHIPS investment also includes up to $40 million in dedicated workforce funding. Additionally, to attract and maintain the skilled workforce necessary for its projects, Samsung is exploring options in collaboration with the Department to build supply and defray the cost of high-quality and accessible child care for its employees.
Samsung’s waste management efforts at its Austin site have received the Zero Waste to Landfill Gold Level certification for recycling or reusing 96% of waste and its wastewater pretreatment practices have received longstanding recognition from the City of Austin. The Taylor site would use leading-edge sustainability strategies to promote carbon-free electricity use, conserve water resources, and avoid or reduce other impacts to the environment.
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% 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. The terms contained in the long-form term sheet and the final award documents may differ from the terms of the PMT being announced today.
About CHIPS for America
The Department has received more than 630 statements of interest, more than 180 pre-applications and full applications for NOFO 1, and more than 160 small supplier concept plans for NOFO 2. The Department is continuing to conduct rigorous evaluation of applications to determine which projects will advance U.S. national and economic security, attract more private capital, and deliver other economic benefits to the country. The announcement with Samsung is the sixth PMT announcement the Department of Commerce has made under the CHIPS and Science Act, with additional PMT announcements expected to follow throughout 2024.
CHIPS for America is part of President Biden’s economic plan to invest in America, stimulate private sector investment, create good-paying jobs, make more in the United States, and revitalize communities left behind. CHIPS for America includes the CHIPS Program Office, responsible for manufacturing incentives, and the CHIPS Research and Development Office, responsible for R&D programs, that both sit within the National Institute of Standards and Technology (NIST) at the Department of Commerce. NIST promotes U.S. innovation and industrial competitiveness by advancing measurement science, standards, and technology in ways that enhance economic security and improve our quality of life. NIST is uniquely positioned to successfully administer the CHIPS for America program because of the bureau’s strong relationships with U.S. industries, its deep understanding of the semiconductor ecosystem, and its reputation as fair and trusted. Visit https://www.chips.gov to learn more.
Here’s what they are saying about this significant announcement:
Biden-Harris Administration Leaders:
President Joe Biden: “I signed the CHIPS and Science Act to restore U.S. leadership in semiconductor manufacturing and ensure America’s consumers, businesses, and military maintain access to the chips that underpin our modern technology. 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. These facilities will support the production of some of the most powerful chips in the world, which are essential to advanced technologies like artificial intelligence and will bolster U.S. national security.” [Statement]
U.S. Secretary of Commerce Gina Raimondo: “Thanks to President Biden’s CHIPS Act, Samsung is expected to invest more than $40 billion to build a cluster of semiconductor factories here in the U.S. that will employ thousands of workers in good-paying jobs, support a robust supplier ecosystem, and fuel innovation through R&D. Proposed CHIPS investments like the ones we are announcing today will be a catalyst for continued private sector investments to help secure the long-term stability we need to put America at the beginning of our semiconductor supply chain and to safeguard a strong resilient ecosystem here at home.” [Statement]
Lael Brainard, White House National Economic Advisor and Co-Chair of the CHIPS Implementation Steering Council: “Texas is now set to become another comprehensive advanced semiconductor ecosystem, with thousands of good jobs thanks to President Biden’s leadership. With this investment, President Biden’s semiconductor investments are now supporting innovation communities across the country from Arizona to Colorado and now Texas. Delivering on the President’s vision that if we invent it here, we should make it here, this announcement dedicates $40 million in workforce funding to develop future generations of leading technologists, technicians, and engineers.” [Statement]
Under Secretary of Commerce for Standards and Technology and NIST Director Laurie E. Locascio: “Semiconductor research and development is critical to building a robust and thriving semiconductor manufacturing industry in the United States. Samsung’s plans to build a cutting-edge R&D and advanced packaging facilities in Texas are shining examples of the types of R&D projects that will help build, and heavily contribute to, America’s chipmaking industry.” [Statement]
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Industry Voices:
Jensen Huang, Founder and CEO, NVIDIA: “We congratulate Samsung for its important investment and applaud the Commerce Department for its support. We are excited to continue our long-standing partnership with Samsung as it brings new facilities to Taylor.” [Statement]
Lisa Su, CEO, AMD: “The expansion of Samsung’s Texas manufacturing facilities is another major step that will help re-establish an advanced semiconductor supply chain and ecosystem in the U.S. Samsung is a proven foundry provider with the scale and expertise needed to provide additional leading-edge U.S. manufacturing to meet the growing demand for high-performance computing and AI.” [Statement]
Dr. Roawen Chen, Chief Supply Chain & Operations Officer, Qualcomm: “Qualcomm congratulates Samsung, a longstanding strategic partner, on this most recent expansion of its foundry footprint in the United States. This investment, made possible through the awarding of CHIPS and Science Act funding by the Department of Commerce, will strengthen the U.S. semiconductor ecosystem and enhance the industry’s supply chain resilience over the coming years.” [Statement]
Karn Budhiraj, VP Procurement, Tesla: “We congratulate Samsung and the Dept. of Commerce on this monumental groundbreaking. The Taylor campus is a massive leap forward in securing America’s advanced-node silicon supply chain while furthering the technological partnership between the United States and South Korea.” [Statement]
Kye Hyun Kyung, President and CEO, Device Solutions (DS) Division, Samsung Electronics: “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. To meet the expected surge in demand from U.S. customers, for future products like AI chips, our fabs will be equipped for cutting-edge process technologies and help advanced the security of the U.S. semiconductor supply chain.” [Statement]
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Members of Congress:
U.S. Senator John Cornyn (TX): “By investing in leading-edge semiconductor manufacturing, we are helping secure this vulnerable supply chain, boosting our national security and global competitiveness, and creating new jobs for Texans. The chipmaking capabilities these resources will enable at Samsung, including advanced packaging and research and development will help the U.S. reclaim its leadership role in the critically important semiconductor industry, and I look forward to seeing more Texas-led advancements in the years to come.” [Statement]
U.S. Congressman Colin Allred (TX-32): “Great news for Texas! The CHIPS Act continues to deliver and create jobs for our state and position us as a continued leader in high-tech manufacturing. Let’s keep building on this progress.” [Tweet]
U.S. Congressman Michael McCaul (TX-10): “Today’s announcement further solidifies the Lone Star State as the best place to do business — and the perfect spot for investment in the semiconductor industry. This historic investment will bring thousands of high-paying jobs to our state, boost the economy, and strengthen our national security for years to come. I’m proud to have played a role in this pivotal moment and am confident Samsung’s work here will leave behind a better America — and a better world — for future generations.” [Statement]
U.S. Congressman Lloyd Doggett (TX-37): “Since first joining our local effort in 1996 to encourage its location in Austin, I have appreciated Samsung as a creator of great products and great jobs. Now more than ever with its new fab in Taylor and expansion in Austin, Samsung ensures that Central Texas remains a major tech hub and international gateway for businesses worldwide. With billions of federal funds on the way from national security legislation I supported, we are strengthening our partnership with Samsung and further establishing our region as an essential part of American manufacturing.” [Statement]
U.S. Congressman Pete Sessions (TX-17): “This increased investment for Samsung’s semiconductor complex in Taylor, Texas will be a rising tide of prosperity for all of Williamson County and Central Texas. This investment advances Texas’s position as a technology industry leader and encourages suppliers to relocate to Texas and for more products to be made right here in America. Samsung is laying the foundation for a future where innovation drives economic success and enhances the wellbeing of every Texan in our region.” [Statement]
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State and Local Officials:
Texas State Senator Sarah Eckhardt: “Samsung has become an important part of our Central Texas economy, exemplifying the opportunity infrastructure Texas can develop and folks can thrive with. They have become a major employer and have a critical role in nurturing our talent pipeline behind our economic success. Our state has a responsibility to Texans to actively support the growth Samsung is galvanizing here; we are so pleased they continue to see the promise Central Texas holds and look forward to sharing that promise of opportunity with all.” [Statement]
Texas State Representative Caroline Harris-Davila: “Through strong partnerships and a commitment to economic development, Samsung’s semiconductor industry in Texas is not just shaping tomorrow – it’s transforming the future for generations to come.” [Statement]
Judge Andy Brown, Travis County: “I’m proud of our partnership with Samsung and the economic opportunities that expanding the semiconductor ecosystem in Texas will bring for future generations in our community,” said Travis County Judge Andy Brown. “This expansion will provide the talent pipeline and economic development we need for our workforce and mark Travis County as an industry leader in semiconductor manufacturing.” [Statement]
Mayor Kirk Watson, City of Austin: “Austin and Central Texas are a positive focal point in the world’s semiconductor industry. And we enjoy this distinction because of Samsung and all it has done for our community. Whether it’s partnering with us to create future-focused talent pipelines or helping drive our economic development or being a leader in enhancing our quality of life, Samsung is an essential part of the Central Texas ecosystem and helped to put us on the map.” [Statement]
Natasha Harper Madison, City of Austin Council Member: “Our City’s collaboration with valued corporate partners like Samsung, and folks at the Department of Commerce are crucial for our city. Austin is a thriving and inclusive local economy in which we are seizing opportunities to support transformation for generations to come. That includes positive community impacts, expanding the semiconductor ecosystem in Texas and economic development impact of today and tomorrow.” [Statement]
Mayor Christopher Harvey, City of Manor: “Samsung has been an important part in how we empower, equip, and edify our students and community. We are truly thankful for our relationship with Samsung and hope their new facilities will come with new and innovative ways to create tomorrow’s workforce together.” [Statement]
Russ Boles, County Commissioner, Williamson County: “Families are special. They support each other, they believe in each other, and they invest in each other. Sometimes family members are by birth, but sometimes, if you’re lucky, you get to choose your family members. And that is what Williamson County and Samsung are, family. I continue to appreciate their support, belief, and investment into the people of Williamson County.” [Statement]
Dave Porter, Executive Director, Williamson County Economic Development Partnership: “We are extremely grateful for this partnership between Samsung and the U.S. Department of Commerce. To be part of this epic effort to bring semiconductor manufacturing jobs back to the U.S. is exciting and critically important to our national security.” [Statement]
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Organizations:
John Neuffer, President and CEO, Semiconductor Industry Association: “Today’s announcement will help Samsung bring more semiconductor production, innovation, and jobs to U.S. shores, reinforcing America’s economy, competitiveness, and critical chip supply chains. We applaud Samsung for investing boldly in U.S.-based manufacturing and salute the U.S. Commerce Department for making significant headway in implementing the CHIPS Act’s manufacturing incentives and R&D programs. We look forward to continuing to work with leaders in government and industry to ensure the CHIPS Act remains on track to help reinvigorate U.S. chip manufacturing and research for many years to come.” [Statement]
Joe Stockunas, President, SEMI Americas: “SEMI congratulates Samsung on the investment from the U.S. Government resulting from the CHIPS and Science Act of 2022 that will enable an expansion of their existing manufacturing facility and construction of a second in Texas. Additionally, it will support an advanced packaging facility, while increasing Samsung’s research and development capabilities.” [Statement]
Mark McManus, General President, Plumbers and Pipefitters United Association: “Thanks to President Biden’s leadership and his CHIPS and Science Act, the United States is posed to reclaim our rightful place as the world leader in semiconductor manufacturing. The terms announced this morning to expand Samsung’s production in Texas will not only power the future of semiconductors, but they will create good-paying union jobs for generations to come. The men and women of the United Association are the best trained and most highly skilled craftspeople in the industry – and with thousands of miles of pipe and hundreds of thousands of square feet of clean room space in these fabs, we cannot settle for anything less. We look forward to our continued partnership with Samsung and with the Biden Administration to ensure the future of semiconductor manufacturing is not just American made, but union made.” [Statement]
The National Association of Manufacturers: “The NAM-backed CHIPS and Science Act is supercharging our efforts to make semiconductors here in America. We will continue to work with the Biden administration to ensure the U.S. leads the world in the production of this cutting-edge technology.” [Tweet]
Ben White, President & CEO, Taylor Economic Development Corporation: “Taylor is proud to be home of this transformational project, not only for our City, but for State and Country. Our tremendous partnership with Samsung will help grow the jobs of tomorrow in our community. Samsung has made Taylor, Texas a hub for semiconductor industry!” [Statement]
Jeremy Martin, President & CEO, Greater Austin Chamber of Commerce: “There is no question. Samsung Austin Semiconductor continues to be a global leader in advancing innovation and improving the lives of people worldwide through the technology products we use every day. What I am most proud of is their corporate citizenship and its commitment to our region. For decades, Samsung has contributed generously to advance important community priorities, served as a valued voice of business at all levels of government, and invested in developing highly-skilled and talented individuals. I am humbled by the company’s unprecedented investment in Central Texas, and I deeply appreciate our continued partnership.” [Statement]
Gary S. Farmer, Chairman, Greater Austin Economic Development Corporation/Opportunity Austin: “Without question, Central Texas is blessed that Samsung Electronics is located and expanding in our region. Since its earliest days in Austin nearly 30 years ago, Samsung has consistently engaged in meaningful community partnerships, provided incredible employment opportunities, embraced educational programs to enhance future employment options for young people, and served the role as a model corporate citizen. Samsung’s decision to expand the semiconductor ecosystem in Texas will surely enhance economic prosperity and national security for generations to come. I know that I speak for the entire community when I say thanks and congratulations to Samsung for its growth and success.” [Statement]
Mark Duval, President and CEO, GAACC: “Samsung has been a strong community partner and important technology leader in Central Texas for almost 30 years. We’re delighted by their success and excited to see their plans to continue to invest and grow in the region.” [Statement]
Monica Munoz Andry, President & CEO, Greater Austin Hispanic Chamber of Commerce: “The Greater Austin Hispanic Chamber of Commerce is proud to partner with Samsung Electronics in furthering our mission of economic growth and workforce development in our diverse local communities.” [Statement]
Kevin Fincher, CEO, ARMA: “Austin Regional Manufacturers Association (ARMA) is truly excited to see the investment Samsung Austin Semiconductor (Samsung) is making in Central Texas and the greater economic impact it will have in our communities. Samsung has been a long-time ARMA member and supporter of ARMA’s mission. Together, both entities are working together with community partners to address national security matters in the semiconductor supply chain and workforce development needs. With the announcement of the newly expanded investment in an additional fab, R&D center and advanced packaging comes additional opportunities for well-paying careers in advanced manufacturing that will ripple throughout the entire semiconductor supply chain in Central Texas. Samsung has led with investments in workforce development and ARMA is excited to be a partner with Samsung in addressing these issues. We applaud Samsung for the investments they are making in the Central Texas communities.” [Statement]
Tia Stone, President & CEO, Taylor Chamber of Commerce: “Samsung’s commitment to being a supportive community partner speaks volumes about their values and dedication to making a difference beyond their business operations. They have already made significant impact on our city, schools and non-profit businesses. The Taylor Chamber is proud support to Samsung’s continued growth and prosperity for the of our nation and our community.” [Statement]
Ed Latson, CEO, Opportunity Austin: “Congratulations to Samsung Austin Semiconductor on this award, which underscores the value of the CHIPS Act and the company’s pivotal role in solidifying Central Texas as a leading hub for semiconductor manufacturing. The Austin region’s economy and competitive standing are made stronger by Samsung’s contributions from providing opportunities across all education levels to investing in skilled labor, community development, and environmental stewardship. We value their continued partnership and collaboration in the region as we prosper together.” [Statement]
Debbie Charbonneau, Manor Chamber of Commerce, Executive Director and Past President: “Samsung Austin Semiconductor has played a huge role in Manor’s growth. Manor is hoping to take advantage of these opportunism from Samsung which includes new businesses, while always holding on to the small town feel that we are known for. Samsung is creating thousands of jobs in the next couple of years, which directly affects the community of Manor in a very positive way. Manor has a great opportunity to have Samsung in our community to help with job opportunities, growth, education, training, and a great partnership. The Manor Chamber welcomes Samsung and their partnership and looks forward to the future and the growing partnership in our community.” [Statement]
Elaine Lofton, President, Manor Schoolhouse Foundation: “The Manor Schoolhouse Foundation is proud to partner with Samsung Austin Semiconductor to support innovative teaching practices that advance the learning and educational achievement of students in the Manor Independent School District. Samsung Austin Semiconductor has generously supported hundreds of creative instructional programs that enhance educational opportunities for underserved, economically disadvantaged students through academic enrichment, social-emotional learning, leadership development, and career and technology experiences that drive academic achievement and encourage lifelong success.” [Statement]
Paula Bookidis, CEO, Girl Scouts of Central Texas: “Samsung Austin Semiconductor’s long-term partnership with Girl Scouts of Central Texas has encouraged thousands of local Girl Scouts to explore STEM fields and topics, increase their STEM confidence, and pursue STEM studies and roles in the STEM workforce, increasing workforce diversity. Samsung Austin Semiconductor’s support has been instrumental in helping Girl Scouts believe they have a role to play in building our future through science, technology, engineering, and math. We are grateful for their investment, which strengthens our community and our future.” [Statement]
Shane Woods, Executive Director, Girlstart: “Thank you to Samsung for being an incredible partner in our mission to inspire and empower girls in STEM! We are proud to collaborate with Samsung as they champion STEM talent pipelines and expand the semiconductor ecosystem in Texas, creating job possibilities for generations to come. Together, we are building a brighter future where every girl knows she belongs in STEM!” [Statement]
Source – U.S. NIST