From Phones To National Security: Inside Biden's $6.4 Billion Chip Deal With Samsung

By Tommy Wilson | Tuesday, 16 April 2024 04:10 PM
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In a significant move to bolster the domestic semiconductor industry, the Biden administration unveiled a preliminary agreement with Samsung on Monday.

The South Korean tech giant is set to invest $6.4 billion in chip manufacturing in Texas, marking the latest deal facilitated by the CHIPS and Science Act, a bipartisan law enacted by President Biden in 2022.

The deal, which is expected to generate over 20,000 jobs through construction and manufacturing roles, will see Samsung inject more than $40 billion into the region over the coming years. The investment will be directed towards the expansion of new facilities in Taylor and Austin, Texas.

President Biden, in a statement, underscored the significance of the agreement. He said, "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." He further emphasized that the facilities would support the production of some of the world's most powerful chips, crucial for advanced technologies like artificial intelligence, and would bolster U.S. national security.

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The Austin investment will enhance an existing facility to support the production of chip technology utilized in the aerospace, defense, and automotive industries. Meanwhile, the investment in Taylor will facilitate the construction of a comprehensive advanced manufacturing system. This will enable Samsung to produce leading-edge chips and conduct advanced packaging research and development. The semiconductors manufactured in Taylor are expected to be used in the communications, automotive, and defense industries, according to the Biden administration.

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The Samsung deal is the latest in a series of investments spurred by the CHIPS law, which the Biden administration has been promoting for its substantial economic benefits. The White House has previously announced five other preliminary agreements with companies for CHIPS funding, including Intel, GlobalFoundries, and Bae Systems.

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President Biden has consistently highlighted the importance of the CHIPS and Science Act, noting the ubiquity of microchips in everyday technology, from phones and cars to home appliances. Administration officials have stressed that the law is pivotal in enhancing domestic production of chips, thereby reducing U.S. dependence on foreign supply chains.

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