By Alexandra Alper
WASHINGTON (Reuters) -The Biden administration plans to announce that it will provide more than $6 billion to South Korea's Samsung (KS:) next week to expand its chip production in Taylor, Texas, as it seeks to increase chip manufacturing in the U.S. In the U.S., two said people familiar with the matter.
The subsidy, to be unveiled by Department of Commerce Secretary Gina Raimondo, will go toward construction of four facilities in Taylor, including a $17 billion chip manufacturing plant that Samsung announced in 2021, another factory, a advanced packaging facility and a research and development center. one of the sources said.
It will also include an investment in another undisclosed location, the source said, adding that Samsung will more than double its investment in the United States to more than $44 billion as part of the deal.
The Commerce Department and Samsung declined to comment. Texas Gov. Greg Abbott's office did not respond to requests for comment.
One of the sources said it would be the third largest in the program, just behind Taiwan's TSMC, which received $6.6 billion on Monday and agreed to expand its investment from $25 billion to $65 billion and add a third factory in Arizona by 2030.
The announcement will cap a series of major Chips and Science grants in quick succession as the United States seeks to expand domestic chip production and attract capital that could have been used to build plants in China and the region.
In 2022, Congress passed the Chips and Science Act to boost domestic semiconductor production with $52.7 billion in research and manufacturing subsidies. Lawmakers also approved $75 billion in government borrowing authorization, but one of the sources said Samsung does not plan to take out loans.
The goal of the CHIPS Act is to reduce dependence on China and Taiwan, as the share of global semiconductor manufacturing capacity in the US has fallen from 37% in 1990 to 12% in 2020, according to the Association of the Semiconductor Industry.
US President Joe Biden will not attend the event, the two people said. He faces a tough fight to win a second term in November against former president and Republican rival Donald Trump. Greg Abbott, the Republican governor of Texas, was invited to attend, one of the people added.
While both TSMC and Intel (NASDAQ , which received $8.5 billion to expand its US chip production last month, will expand production in the key state of Arizona, Samsung's expansion in Texas is seen as , reliably Republican, is less likely to help Biden at the polls.
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