Samsung Electronics Receives $4.745 Billion Chip Subsidy from the U.S.

On December 20, the U.S. Department of Commerce announced that it would provide Samsung Electronics with up to $4.745 billion in direct funding under the chip incentive program. This funding will support Samsung's plans to invest over $37 billion in the coming years to develop a comprehensive ecosystem for chip design and production at its existing facilities in Central Texas.

Specifically, Samsung plans to build two logic wafer fabs and one R&D wafer fab in Texas, and to expand its existing facilities in Austin. This project aims to strengthen Samsung's chip production capabilities in the U.S. while further promoting the development of the American chip industry. Samsung Electronics is one of the world's largest semiconductor manufacturers, and this $4.745 billion subsidy is part of the U.S. government's incentive program designed to encourage the growth of the semiconductor industry.

On April 15, Samsung Electronics signed a preliminary memorandum of understanding (MOU) with the U.S. government regarding the subsidy payments. However, Samsung faced significant delays during the final negotiations for the subsidy. The political climate in both the U.S. and South Korea added complexity to the situation. Recent impeachment proceedings against South Korean President Yoon Suk-yeol have raised concerns that the U.S. might use this as leverage against the new South Korean government, potentially delaying the subsidy for Samsung. Additionally, the transition between the Biden administration and the incoming Trump administration added further uncertainty.

President-elect Trump expressed negative views on semiconductor subsidy legislation during his campaign. Vivek Ramaswamy, who is set to lead the Department of Government Efficiency (DOGE) in the Trump administration, recently mentioned on X, "The Biden administration is accelerating spending before the transition of power. I will suggest that auditors carefully review these final contracts."

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Source: Aijiwei

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