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Loss for Samsung, win for SK hynix after U.S. reveals final CHIPS Act funding

Published: 22 Dec. 2024, 18:39 Updated: 22 Dec. 2024, 18:41

SHIN HA-NEE
[email protected]

The flags of Samsung, Texas, Korea and United States fly in front of the construction site of Samsung Electronics' semiconductor chip plant in Taylor, Texas, on Jan. 2. [EPA/YONHAP]

The U.S. Department of Commerce finalized its funding awards under the CHIPS and Science Act ahead of President-elect Donald Trump’s inauguration, with the results a mixed bag for Korea's chipmakers.

The finalization significantly alleviates business uncertainties for Korean companies, as the president-elect and his cabinet nominees have signaled their intention to overhaul, if not repeal, the CHIPS Act.

The department announced Friday that it had allocated Samsung Electronics direct funding of up to $4.75 billion for the chipmaker's investments of more than $37 billion in its Texas facility. The allocation was 26 percent lower than the $6.4 billion that was initially promised. Samsung scaled back its U.S. investment plans from $45 billion to $37 billion over the course of this year.

“With nearly 30 years of semiconductor manufacturing experience in the United States, we are proud and grateful for the longstanding relationships we have established with our American partners and customers, as well as communities across Texas,” said Samsung Electronics Vice Chairman Jun Young-hyun.

A day before the announcement, SK hynix secured $458 million in subsidies for its $3.9 billion chip packaging facility in Indiana. Up to $500 million in loans will be available under the CHIPS and Science Act on top of the subsidy, according to the Commerce Department.

“With today’s award, the United States will be the only country that has manufacturing fabs from all five leading-edge semiconductor companies,” said National Economic Advisor Lael Brainard in a release by the U.S. Commerce Department.

BY SHIN HA-NEE [[email protected]]