Samsung (SSNLF.US) and Texas Instruments Incorporated (TXN.US) received over $6 billion in subsidies for chip manufacturing, speeding up the production of chips in the United States.

Samsung Electronics (SSNLF.US) and Texas Instruments Incorporated (TXN.US) have finalized an agreement to receive government support of billions of dollars to build new semiconductor factories in the United States, as a key part of the Biden administration's "CHIPs Act" initiative. According to the legally-binding agreement announced on Friday, Samsung will receive up to $4.75 billion in funding, while Texas Instruments Incorporated will receive $1.6 billion, to help them build factories in Texas and Utah. The final deal means that chip manufacturers can start raising funds once certain milestones are reached. The final agreement terms for Texas Instruments Incorporated are consistent with the initial agreement, but Samsung's returns are much lower than originally expected. In a statement, Samsung said, "We have partially modified our mid-to-long-term investment plan to optimize overall investment efficiency." This suggests that the project will not be as large as originally planned. "The incentive measures have been allocated through rigorous negotiations with the U.S. government. We are currently unable to disclose the details of the agreement." The "CHIPs Act" plan signed into law by President Biden in 2022 allocates $39 billion in grants, $75 billion in loans and guarantees, and 25% tax credits. The goal of this act is to boost semiconductor production in the United States after decades of manufacturing being moved overseas. Officials have already allocated most of the funds, and Commerce Secretary Raimundo is working to finalize as many deals as possible before leaving office. The latest funding complements the largest grant of the program, helping to ensure comprehensive local semiconductor production. Texas Instruments Incorporated is the largest manufacturer of analog chips and embedded processors. Samsung is the world's largest memory chip manufacturer and a major supplier for other companies' advanced outsourcing production. Texas Instruments Incorporated and its peers focus on traditional chips that do not require the most advanced production processes, yet are increasingly vital for the economy and defense. These chips are widely used in everything from military equipment to consumer electronic products. For example, vehicles today require a large number of sensors, power converters, power management, and motor control chips to bridge the gap between the digital world and the physical world. In another statement, the U.S. Department of Commerce also identified a plan to provide $407 million in direct financing to Amkor Technology (AMKR.US). This funding will support the company's investments in Arizona, where they are building more advanced packaging capabilities. As chips become more complex and require sophisticated technology to connect them to other parts of electronic systems, the importance of this field is constantly increasing. This work is increasingly being done in low-cost regions overseas. The funds for Texas Instruments Incorporated will support funding for three new large factories: two in Sherman, Texas, and one in Lehi, Utah. Texas Instruments Incorporated stated that they will create 2,000 new jobs for this Dallas-based company. Samsung is expanding its factory in central Texas, including work on so-called logic chips (components that act as the brain of systems) and a research and design facility in Taylor. The company will also expand its existing factory in Austin. Texas Instruments Incorporated also plans to invest approximately $40 billion in building five new factories in the United States: one in Utah and four in Texas. Government funds will only support the first two factories in Texas, as officials are prioritizing projects that will be operational by the end of this decade. In addition to the funding announced on Friday, the company also expects to receive up to $8 billion in tax credits from the "CHIPs Act" for building and tooling expenses.