Samsung Secures $4.7 Billion from US to Boost Chip Production in Texas

Samsung Electronics will receive $4.745 billion in funding from the United States Department of Commerce as part of the CHIPS Incentives Program. This initiative aims to boost domestic semiconductor manufacturing and reduce reliance on foreign chip supplies.

TL;DR

• Samsung secures $4.745 billion from the US to increase domestic semiconductor production.
• The funds will support two new chip fabrication plants, an R&D facility in Taylor, Texas, and the expansion of an Austin facility.
• Samsung struggles to compete with TSMC due to low 3nm chip yields (20% vs. TSMC’s 70%) but prioritizing 2nm technology with production to begin next year.

Investment Details and Expansion Plans

The $4.7B funding will support The South Korean tech giant’s ongoing development of advanced semiconductor fabrication facilities in Texas. Samsung plans to build two (2) logic chip fabrication plants and a R&D (research and development) facility in Taylor, Texas. Also, the funds will aid in the expansion of Samsung’s existing semiconductor manufacturing facility in Austin.

This funding is part of Samsung’s larger $37 billion investment strategy for its Texas operations. While initial plans is predicted $6.4 billion in funding under the CHIPS Act, Samsung has adjusted its investment roadmap to change locations.

Challenges in Advanced Node Production

Samsung has faced many problems in recent years in competing with Taiwan Semiconductor Manufacturing Company (TSMC). TSMC is the global leader in semiconductor manufacturing. Despite substantial investments, Samsung’s market share has diminished as it struggles to attract clients for its 3nm chip nodes.

Reports suggest that Samsung’s 2nd generation 3nm node yields remain around 20%, falling far short of its targets and well below TSMC’s reported 70% yield for similar nodes. These indications highlights the need for Samsung to improve its manufacturing processes to face competitiveness in the semiconductor industry.

Samsung Focus on 2nm Technology

In response to setbacks with its 3nm nodes, Samsung is shifting its focus to its 2nm process node. The company is preparing to begin production of 2nm chips next year. After all, the CHIPS Act funding will play a critical role in supporting Samsung’s efforts to advance its semiconductor technology and strengthen its position in the global market.