Samsung Electronics all set to receive Whopping $6 billion chip subsidy from the United States

Following a horrific earthquake in Taiwan, the United States has taken steps to reduce dependency on Taiwan and China for semiconductor chip manufacturing

By Raunak Bose 10 Apr 2024 in Technology

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Image of Samsung office (via Smartprix) — Samsung office (Image via Smartprix)

The Joe Biden-led United States government seems to have identified a clear roadmap to further boost the country's economic stocks in the upcoming years. As the world moves towards an increase in the use of digital devices, semiconductor chips form an integral part of a country's progress and economic prowess. The United States is keen to jump onto the bandwagon and has decided to award a massive sum of over $6 billion subsidy to Samsung Electronics.

Although the subsidy is yet to be announced officially, reports claim that the $6.6 billion chip subsidy will enable Samsung to expand its chip manufacturing setup in Taylor, Texas. The South Korean electronics company had previously announced the establishment of a whopping $17 billion chip-making plant in the region in 2021.

Samsung Electronics Received the Third Largest Chip Subsidy from the US Government

Taiwan is the leading manufacturer of electronic chips in the world, with most countries depending on them for their supply. The United States wants to reduce its dependence on Taiwan and China for their demand for semiconductor chips. Therefore the US Congress approved the Chips and Science Act in 2022, and the subsidies will become the first of a long line of awards and grants for companies in this sector.

Gina Raimondo, US Secretary of Commerce (Image via Getty Images)

According to various sources, Samsung will use the $6 billion subsidy to construct four manufacturing facilities including an advanced packaging facility and a research and development centre. After the official announcement of the deal by Commerce Department Secretary Gina Raimondo, Samsung's investments in the United States will amount to a colossal $44 billion, almost doubling the number from before.

Joe Biden, who is facing stiff competition from former US President Donald Trump in the presidential election race for 2024, will not attend the official unveiling as per reports. The $6 billion chip subsidy will be the third-largest subsidy awarded by the United States government as part of the Chips and Science Act following the $6.6 billion subsidy offered to Taiwan Semiconductor Manufacturing Co and $8.5 billion to Intel Corp.

This subsidy above $6 billion will make the first quarter of 2024 even sweeter for Samsung Electronics, as the company registered sensational first-quarter earning figures. The South Korean tech giant recently announced that they will record a 931% increase in operating profit as their profits soared to 6.6 trillion Korean won (($4.89 billion).

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