The White House's announcement this week that it would provide up to $6.4 billion in semiconductor manufacturing funding to Samsung (005930.KS) marks the next phase of the Biden administration's efforts to bring semiconductor manufacturing back to the United States. be.
So far, the focus has been primarily on cutting-edge logic semiconductors. The rollout will focus on other areas, such as memory chips, another key element that powers artificial intelligence.
Billions of dollars could be distributed to companies focused on this space in the coming weeks and months.
So far, Biden's team has allocated about $23 billion of the $39 billion set aside for manufacturers, funding facilities from Arizona and New Mexico to Ohio and New York. is allocated to.
Other recent big awards besides Samsung include a $6.6 billion grant to Taiwan Semiconductor Manufacturing Company (TSM) and an $8.5 billion grant to Intel (INTC).
The funding comes from the Chip and Science Act, which went into effect 20 months ago, and the White House said it would use a total of about $500 to reinvigorate both chip manufacturing and research in the U.S. over the next few years. billions of dollars can be spent.
Samsung's announcement this week will help fund the facilities in Austin and Tyler, Texas. The federal funding will be part of a total investment of about $45 billion to build clusters in the state.
The new facility is scheduled to come online in phases between now and the end of the decade and will include two chip production manufacturing facilities, a research center and a packaging facility.
At this facility, Samsung is focused on cutting-edge chips, including production using the 2-nanometer process, the world's most advanced process technology.
“These facilities will support the production of the world's most powerful chips, essential for advanced technologies such as artificial intelligence, and strengthen America's national security,” President Biden added in a statement.
In addition to Samsung, TSMC and Intel, three smaller manufacturing awards were previously announced.
BAE Systems (BAESY) has about $35 million, Microchip Technology has $162 million and GlobalFoundries (GFS) has $1.5 billion, primarily to fund the production of less advanced but still important chips. was offering.
Further in the future
Biden officials hope the remaining awards will help stimulate other aspects of the complex industry.
Perhaps the top priority is cutting-edge memory chips, which are still important for artificial intelligence, even though they can't handle the high-profile computational tasks assigned to logic chips.
For example, Micron (MU), which bills itself as “the only U.S.-based memory manufacturer,” is still waiting for an award. President Biden visited the Micron factory in New York in 2022, calling the company's efforts there “one of the most significant investments in American history.”
Other awards may also focus on chip manufacturing, which is less advanced, although still important for applications ranging from national security to consumer electronics.
Semiconductor supply chains will also be a priority in future awards, with a second wave possibly occurring in the coming years.
Efforts there remain focused on strengthening global processes, even as the Biden administration aims for an ambitious goal of having 20% of the world's most advanced logic chips made in the United States by the end of 2010. It will be.
Samsung's announcement on Monday includes a focus on semiconductor packaging — the production of metal, plastic, glass or ceramic containers to hold chips — that Commerce Secretary Gina Raimondo told reporters this week. I emphasized that fact in my comment.
“It's not just manufacturing chips, it's packaging chips in the same location,” she said of the facility Samsung is building in Texas. He points out that currently, “even chips made in the United States, including chips used in defense systems, are often shipped to Taiwan for packaging.”
Overall, the Biden administration said the state-of-the-art funding request totaled more than $70 billion, far exceeding the $39 billion for the entire manufacturing program.
Ben Werschkul is Yahoo Finance's Washington correspondent.
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