Benzinga - by Benzinga Neuro, Benzinga Staff Writer.
In a significant development, Samsung Electronics Co. (OTC:SSNLF) is reportedly on the verge of securing over $6 billion from the U.S. government to expand its chipmaking operations in the country.
What Happened: As per a Bloomberg report released on Thursday, citing people familiar with the matter, the U.S. is gearing up to provide more than $6 billion to Samsung. This funding will reportedly assist the tech behemoth in broadening its operations beyond a previously announced project in Texas.
The financial aid, part of the 2022 Chips and Science Act, is one of several substantial awards that the Commerce Department is expected to announce in the coming weeks.
This also includes a grant of over $5 billion to Samsung’s Asian rival, Taiwan Semiconductor Manufacturing Co. (NYSE:TSM), according to sources who chose to remain anonymous ahead of the official declarations.
Why It Matters: This funding signifies a crucial step in the U.S. government’s efforts to bolster domestic chip production amid a global semiconductor shortage. The move is part of a broader initiative to reduce dependence on foreign chip manufacturers and ensure a steady supply of semiconductors, which are vital components in a wide range of electronic devices.
For Samsung, the funding will provide a significant boost to its expansion plans in the US. The company had previously announced a project in Texas, and this additional funding will enable it to broaden its operations beyond the Lone Star State.
Meanwhile, the grant to TSMC underscores the government’s commitment to fostering competition in the chipmaking industry. This could potentially lead to advancements in chip technology and lower prices for consumers.
As of 10:09 a.m. Seoul, Samsung Electronics is trading at 73,600 won, down 700 won (0.94%).
Price Action: TSM shares on the NYSE closed 2.14% lower at $139.10, according to data from Benzinga Pro.
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