The USA will award $4.74 billion to Samsung to make chips locally

Samsung will use $4.745 funding as a part of its $37 billion chip plants in Texas

The US Commerce Department announced that it is offering $4.745 to Samsung Electronics under the country's CHIPS (Creating Helpful Incentives to Produce Semiconductors) Act. Samsung will use this funding to construct two leading-edge logic chip fabrication plans and a chip R&D fabrication plant in Taylor, Texas.

The South Korean firm will also use this funding to expand its existing semiconductor chip plant in Austin, Texas.

Samsung was initially slated to get $6.4 billion under the CHIPS Act. However, the funding has been revised, as Samsung has revised its mid-to-long-term investment for further optimization. What that likely means is that Samsung has reduced its investment compared to the original plan.

The South Korean firm, once a fierce competitor to current market leader TSMC, has fallen behind in the race. Despite spending billions of dollars over the years, its market share has only reduced. The company is facing trouble getting clients for its 3nm and more advanced nodes, while TSMC is exclusively bagging deals for such nodes.

While Samsung claimed that the yield of its second-generation 3nm process node is stable, recent reports claim it is just 20%. That is less than a third of its target. Samsung will need to work hard on this if it wants to compete with TSMC, which reportedly has over 70% yield for its 3nm nodes.

Samsung plans to start the production of chips based on its 2nm process node next year. Since it has missed the boat with its 3nm process node, the company is diverting its investment to its 2nm process node.