The Biden administration has made significant strides in bolstering the US semiconductor industry by awarding Samsung Electronics a revised incentive of $4.745 billion as part of the Chips Act. This funding aims to enhance operations and create 'tens of thousands' of jobs in Texas, where Samsung plans to invest over $37 billion to establish two new logic fabrication plants and a research unit in Taylor, Texas, alongside an expansion in Austin. However, this amount reflects a 20% reduction from earlier announcements [b7ea0f70][ba3476e2].
In addition to Samsung, Amkor Technology's funding has been cut from an initial $600 million to $407 million for its advanced packaging facility in Peoria, Arizona, which is expected to create around 2,000 manufacturing jobs. U.S. Secretary of Commerce Gina Raimondo emphasized the importance of advanced packaging for strengthening the domestic supply chain [ba3476e2].
These adjustments come amid a broader strategy to revitalize the semiconductor sector, which has seen the US market share decline from 37% in 1990 to just 10% in 2022. Approximately $32 billion of the Chips Act funding has already been awarded, with expectations to create over 125,000 jobs across the sector [b7ea0f70].
In a related development, SK Hynix Inc. has secured up to $458 million in grants and $500 million in loans for an advanced chip packaging facility in Indiana, representing a total investment of $3.87 billion. This facility will package chips sent from SK Hynix's plants in South Korea, further strengthening the semiconductor supply chain in the United States [736281a7].
The SK Hynix investment is part of a larger strategy to invest up to $15 billion in US projects, positioning the company as a key player in high-bandwidth memory chip production, essential for artificial intelligence software [736281a7]. The deal is also in line with the 2022 Chips and Science Act, which has spurred over $400 billion in investments aimed at enhancing the US semiconductor industry [736281a7].
Additionally, the US Energy Department has finalized a $9.63 billion loan to the BlueOval SK joint venture, a collaboration between Ford Motor and SK On, to construct three battery manufacturing plants in Tennessee and Kentucky. This loan is the largest disbursement from the Advanced Technology Vehicles Manufacturing program and is expected to significantly boost electric vehicle production in the US [922f7fce].
As these companies ramp up their investments, SK On is also working towards profitability, having reported a reduced operating loss in the third quarter of 2023. The company aims to leverage US tax credits and improve productivity at its overseas plants to achieve this goal [57d56aed].
Overall, these developments underscore a significant push by the US government and major companies like Samsung, Texas Instruments, and SK Hynix to enhance domestic manufacturing capabilities in both the semiconductor and electric vehicle sectors, which are critical for the future of technology and sustainability [b7ea0f70][736281a7][922f7fce][57d56aed].