Samsung’s US Semiconductor Expansion Could Face Setbacks from Grant Cuts

For the past few years, Samsung has been building its cutting-edge chip manufacturing plant in Taylor, Texas. The company secured a massive grant from the previous, Joe Biden-led US government for its investment in the country. However, it looks like the Trump administration will cut its grant. The new government is reportedly renegotiating the Biden administration’s grants to semiconductor firms.

Samsung’s $4.7 billion semiconductor grant under the CHIPS and Science Act is at risk

Signed in 2022 by President Biden, the CHIPS and Science Act allocated $52.7 billion for several companies to boost US semiconductor manufacturing. Under this act, Samsung was supposed to receive $6.4 billion in grants and subsidies for its planned investment of over $44 billion. However, the company later revised the investment amount to $37 billion, resulting in reduced incentives of $4.74 billion.

The new US government may now further reduce Samsung’s CHIPS and Science Act grants. During the recent Senate hearing, US Commerce Secretary Howard Lutnick said, “Some of the Biden-era grants just seemed overly generous, and we’ve been able to renegotiate them.” Lutnick further noted that the goal was to benefit American taxpayers. This suggests that the government has reviewed and adjusted some of the Biden administration’s grants awarded to semiconductor firms.

It seems not all the awards would survive renegotiation. “All the deals are getting better, and the only deals that are not getting done are deals that should have never been done in the first place,” Lutnick said. While Lutnick did not mention Samsung directly, there is a chance that the Korean firm may impact as well.

The Taylor facility is one of the largest semiconductor plants in US history. It will have cutting-edge manufacturing units for 4nm and 2nm chips as well as a research and development center. However, the company has yet to start mass production of chips at the plant due to weak orders from clients. Meanwhile, Samsung is facing pressure as the Taylor government has threatened to lower the incentive package for the delayed chip plant.