U.S. Reduces Samsung's Grant for Texas Chip-Making Project -- WSJ

By Asa Fitch

South Korea's Samsung Electronics on Friday finalized a U.S. grant of up to about $4.75 billion to help fund its chip-making expansion in Texas, significantly less than the $6.4 billion that the company and the government initially announced.

The funds come from the 2022 Chips Act, which sought to reinvigorate U.S. chip-making. In April, the Commerce Department said Samsung would invest $45 billion to build factories in Taylor, Texas. The Commerce Department said Friday its grant would support an investment of over $37 billion in the state.

"Ultimately, we changed this award to align with market conditions and the scope of the investment the company is making," a Commerce Department spokesman said. "Samsung feels that this award represents a strong commitment to their Texas and U.S. efforts and is a sustainable long-term plan for them."

Samsung's chip-making arm has struggled in its quest to make some of the most advanced chips in the world in recent quarters, analysts say. The electronics giant also faltered in its bid to profit from the artificial-intelligence boom, apologizing for its performance in an October letter from the head of its semiconductor business.

The department also changed its award for U.S. chip giant Intel, which is building new factories in Ohio, Arizona and Oregon. Last month it allocated up to $7.87 billion for Intel, down from an $8.5 billion preliminary agreement. Officials cited additional funding of up to $3 billion Intel received to make chips for military applications as the reason for that reduction.

With the Samsung grant, all of the largest U.S. projects expected to get support from the Chips Act have received their funding. In addition to Samsung and Intel, Taiwan Semiconductor Manufacturing Co. got up to $6.6 billion for large new chip-making facilities in Arizona, and memory-chip giant Micron got up to $6.1 billion for facilities in Idaho and New York.

The Biden administration has been racing to finalize the awards before Trump takes the presidency. Trump has raised doubt about his support for the Chips Act, calling it "so bad" in an interview on the campaign trail.

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December 20, 2024 14:21 ET (19:21 GMT)

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