[News] U.S. Finalizes USD 6.1 Billion Micron Subsidy under CHIPS Act as Samsung’s Discussions Stall

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Following the footsteps of semiconductor bellwethers TSMC and Intel, U.S. head-quartered Micron becomes the first memory giant to secure the funding under the CHIPS Act. According to U.S. Department of Commerce, it has finalized a USD 6.165 billion government subsidy for Micron to support semiconductor production in New York and Idaho.

According to Reuters, the funding will support Micron’s long-term plan to invest approximately USD 100 billion in manufacturing in New York and USD 25 billion in Idaho, making it one of the largest government subsidies to chip companies under CHIPS Act. The new subsidy allocation, USD 4.6 billion for New York and USD 1.5 billion for Idaho, matches the amounts announced in April, as per the Reuters report.

Negotiations between Samsung and the U.S. Underway

In contrast, Samsung, which signed a preliminary MOU with the U.S. government concerning subsidy payments even before Micron, has experienced delays in its subsidy negotiations beyond the usual timeframe. In mid-April, the administration announced up to USD 6.4 billion in direct funding to Samsung as part of the CHIPS Act.

According to Business Korea, the primary cause of the delays may be related to Samsung’s slowing investment pace in advanced nodes. Negotiation teams from the U.S. Department of Commerce and Samsung are continuing their discussions, with representatives traveling between the two countries in an effort to reach a resolution, as per Business Korea.

Samsung is originally said to invest USD 17 billion to build a foundry in Taylor, Texas. However, a previous report from Reuters indicated that it has postponed the deployment of ASML manufacturing equipment at its Texas plant, a decision attributed to the company’s inability to secure foundry clients. Notably, the operational start date for the Taylor plant has now reportedly been pushed back to 2026.

Political Complexity in Both Nations Raise Concerns

However, Business Korea notes that the political climate in both countries has added complexity to the situation. The report suggests that recent impeachment proceedings against President Yoon Suk Yeol in South Korea have raised concerns, which could be leveraged against the new South Korean government, potentially delaying subsidies for Samsung.

On the other hand, the transition between Biden and the incoming Trump administration has introduced additional uncertainty, while Trump used to express opposition to semiconductor law subsidies during the election campaign, as indicated by the report.

Samsung’s archrival, SK hynix, is also expecting the funding from CHIPS Act. It announced in August that it has signed a non-binding preliminary memorandum of terms with the U.S. Department of Commerce to receive up to USD 450 million in proposed direct funding and access to proposed loans of USD 500 million. The funding, according to its press release, will be used to build a production base for semiconductor packaging in Indiana.

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(Photo credit: Samsung)