$250 million taxpayer-funded semiconductor grant awarded to Samsung

Another multi-million-dollar grant has been awarded to a multi-billion-dollar company in Texas through the Texas Semiconductor Innovation Fund.

The latest is a $250 million TSIF grant awarded to Samsung Austin Semiconductor, LLC for its semiconductor fabrication facility in Taylor. Samsung Electronics has three semiconductor fab facilities in Texas; two are in Austin and one is in Taylor.

Samsung says it’s making a capital investment of more than $4.73 billion into the Taylor facility. It’s “part of an onshoring strategy and transition to the manufacture of 2-nanometer leading-edge logic chips that power next-generation technologies in areas like 5G, artificial intelligence (AI), and high-performance computing,” the governor’s office said.

In November 2021, Samsung announced it was investing $17 billion in a new facility in Taylor to build world-class semiconductors and microchips in an effort to reduce future supply chain shortages and dependence on manufacturing in China, The Center Square reported.

It remains the largest foreign direct investment in Texas on record, bringing the company’s total Texas investment to more than $47 billion since it began operations in the U.S. in 1978.

“Texas is home to the future of technology and innovation,” Abbott said in a statement. “With approximately $40 billion invested in Texas, Samsung is helping to cement Texas’ position as the leading state for semiconductor manufacturing, bringing in more business investment to Texas communities and creating thousands of good-paying jobs for hardworking Texans.”

The $4.73 billion investment “will provide a more secure domestic supply of chips for critical U.S. industries and ensure the most advanced chips that will power next-generation technologies are Made in Texas,” Abbott said.

“Samsung has been proud to call Texas home for the past 30 years and is deeply appreciative to the State of Texas and the Governor’s Office for this significant grant award,” Samsung Vice Chairman and Head of Device Solutions Young Hyun Jun said in a statement. “This grant will ensure that our semiconductor manufacturing facility in Taylor delivers the most advanced technology for our global customers and continues to reinforce the chip supply chain in the U.S.”

The grant is an outworking of Abbott prioritizing Texas leading the U.S. in chip manufacturing when supply chain issues began under the Biden administration. In 2023, the state legislature passed Texas’ CHIPS Act, which created a new Texas CHIPS Office, the new fund and grant and the Texas Semiconductor Innovation Consortium, The Center Square reported.

The legislature created them to “leverage Texas’ investments in the semiconductor industry, encourage semiconductor-related companies to expand in the state, further develop the expertise and capacity of Texas institutions of higher education, and maintain the state’s position as the nation’s leader in semiconductor manufacturing.”

Critics argue the latest TSIF grant is another example of taxpayer funded corporate welfare, where companies with multi-million and billion-dollar valuations are expanding operations in Texas on the taxpayer’s dime, The Center Square reported. Critics argue they would expand in Texas even if they didn’t get the grant because of Texas’ business friendly and low tax policies.

Prior to the Texas CHIPS Act, “Texas ranks number 1 in the United States for semiconductor manufacturing for the expansion of the semiconductor industry,” Abbott said. He maintains the Texas CHIPS Act “expands that pathway to ensure that Texans will be leading the way for semiconductors for decades to come.”

Throughout his tenure, Abbott has been spearheading foreign investment in Texas.

Last year, Abbott met with Samsung Electronics Co., Ltd. executives at their semiconductor campus in Pyeongtaek, South Korea, as part of an international trip to secure investment in Texas manufacturing. He also met with Samsung executives in Austin to celebrate Samsung’s continuing expansion in Texas and largest foreign direct investment in Texas history.

He also joined South Korean SeAH Group executives to announce their new steel manufacturing plant in Temple. The company said it was investing $110 million in the project that would create more than 100 new jobs.

Texas’ trade with South Korea totals more than $32 billion; South Korea is Texas’ fourth largest trading partner. It also ranks first in foreign direct investment in Texas, with South Korean companies like Samsung making key investments.