Why Samsung semiconductor plant in Taylor is receiving $6.4 billion from federal CHIPS Act – Austin American-Statesman
TAYLOR — The Biden administration and semiconductor production giant Samsung announced a deal Monday that would give $6.4 billion to the corporation’s still-under-construction manufacturing facility in the one-time farming community northeast of Austin that now stands on the precipice of explosive growth.
The money, delivered through the CHIPS and Science Act, which Biden signed into law in 2022, spurred the South Korean company to invest moe than $40 billion to build a cluster of semiconductor factories and was formally announced at an outdoor event featuring U.S. Secretary of Commerce Gina Raimondo along with several regional political leaders and Samsung executives.
“Proposed CHIPS investments like the ones we are announcing today will be a catalyst for continued private sector investments to help secure the long-term stability we need to put America at the beginning of our semiconductor supply chain and to safeguard a strong, resilient ecosystem here at home,” Raimondo said.
U.S. Sen. John Cornyn, R-Texas, and U.S. Rep. Michael McCaul, R-Austin, were among the co-authors of the $280 billion act that was passed to ease the crippling shortage of microchips, which are essential for nearly all modern manufacturing processes.
“This is the epicenter of the technology revolution, the likes of which we have not seen since the Manhattan Project,” McCaul said during the announcement, which was set up with production features similar to an outdoor entertainment event.
U.S. Rep. Lloyd Doggett, D-Austin, called the passage of the CHIPS Act a testament to bipartisan cooperation, which has become increasingly rare in Congress.
“I would be the first to acknowledge that had it not been for Congressman McCaul and Senator Cornyn, overcoming the opposition of most Republicans to pass the CHIPS and Science Act, we wouldn’t have this accomplishment and this event here today.”
Cornyn did not attend the announcement Monday but appeared via video and said, “By investing in leading-edge semiconductor manufacturing, we are helping secure this vulnerable supply chain, boosting our national security and global competitiveness, and creating new jobs for Texans.”
In a written statement from the White House, President Joe Biden emphasized the importance of chip manufacturing on both the economic and military fronts, and he paid homage to the role Texas has long played in the technology sector.
“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,” Biden said. “These facilities will support the production of some of the most powerful chips in the world, which are essential to advanced technologies like artificial intelligence and will bolster U.S. national security.”
Samsung Semiconductor arrived in Austin in 1996 and has invested $18 billion in operating two fabrication units, according to its website. The company is now one of the largest direct foreign investments in U.S. history. In 2021, Samsung announced it was expanding into Taylor with a minimum $17 billion investment to construct a semiconductor manufacturing facility.
“Not only are we investing in our facilities, but we’re also investing in our future, which is the semiconductor talent pipeline,” Kye Hyun Kyung, president and CEO of Samsung’s Device Solutions Division, said during the announcement event. “We’re partnering with elementary schools, high schools and colleges to create the next generation of semiconductor innovators, as well as programs that train military veterans so we can ensure we have the best people running our fabs.”
Taylor Mayor Brandt Rydell said in an interview that Samsung’s arrival in his community of about 20,000 was transformative almost from the time it was announced. The manufacturing site, where construction workers and heavy equipment could be seen at work, has also spawned the rapid development of single- and multi-family housing just a few miles from the city’s central business district, which has retained its small-town flavor.
“It’s difficult to fathom the impact that this is going to have, certainly on this community, also on the region as a whole,” Rydell told the American-Statesman. “As I reflect back on Taylor’s history, we were an agricultural hub (a century ago), but as the tide shifted, Taylor was kind of left aside.
“And now with this investment, Taylor is thrust on the global stage,” he said, adding that he expects his city’s population to double within the next decade or two.
Speaking with reporters after the event, McCaul said the passage of the CHIPS Act could serve as a model for future bipartisanship, especially on matters in which national and economic security take center stage. All of the modern weapons in the arsenals of the world’s military powers, including that of the United States, rely on semiconductors to guide their weapon systems, he said.
If the United States is not in the forefront of microchip development, McCaul said, the result would be catastrophic for the nation.
“It’s a very dangerous time,” he said. “And this is the technology piece that goes into our most advanced weapon systems.”
Raimondo, in her remarks, heaped praise on Biden for pushing to pass the CHIPS Act but also acknowledged McCaul’s role in bringing along Republicans in Congress who complained about the federal expenditure and who might have been reluctant to play a role in achieving a legislative victory for the Democratic president.
Speaking to McCaul, who was seated behind her on the stage, Raimondo thanked the Austin congressman for his effort.
“I will tell you on a personal level, I’m deeply grateful for your leadership,” she said. “Because after this bill passed out of the Senate and it was on its way to the House, for reasons having nothing to do with chips, but having a lot to deal with what was going on in politics, that we were draining votes in the House like you can’t believe.”
Raimondo said she called McCaul, who without hesitation assured her of his support and committed to whipping up the votes to secure the act’s passage.
“You did,” she said, “and it passed, and we are here today.”
