Samsung Electronics foundry plant in Austin, Texas, USA.

Competition began in earnest in the U.S. foundry market as the U.S. government decided to provide $6.4 billion (about 8.9 trillion won) in subsidies to Samsung Electronics on April 15.

The U.S. government enacted the CHIPS Act in 2022. It aims to provide a total of $52.7 billion (about 76 trillion won) to investment companies in the country, including semiconductor subsidies and R&D costs. The goal is to reduce reliance on East Asia by bringing semiconductor production facilities to the U.S.

In return, Samsung Electronics will significantly increase its investment in the U.S. By 2030, it plans to invest more than $40 billion (about 55.3 trillion won). The company is building a factory by investing $17 billion (about 23.5 trillion won) in Taylor, Texas, and has decided to more than double its investment. In addition to the factory currently under construction, the company plans to build an additional new semiconductor factory.

The first plant in Taylor will produce 4-nanometer and 2-nanometer semiconductors from 2026, and the second plant will begin mass production in 2027.

The subsidies for Samsung are the third largest after those for U.S. chipmaker Intel ($8.5 billion) and for Taiwan's TSMC ($6.6 billion).

The ratio of subsidies to investment is 8.5 percent for Intel and 10.2 percent for TSMC, while 14 percent for Samsung. However, unlike Intel and TSMC, which applied for low-interest loans in addition to subsidies, Samsung did not request loan support.

U.S. Commerce Secretary Gina Raimondo said that the investment will allow the U.S. to once again lead the world in manufacturing, advanced packaging, and R&D, as well as in semiconductor design that we are leading.”

Earlier, TSMC also announced that it will increase its investment in the U.S. from $25 billion to $65 billion. Intel is also currently building chip plants in Arizona and Ohio that can mass-produce 1.8 nanometer advanced semiconductors.

Companies receiving subsidies through the CHIPS Act are not allowed to expand their semiconductor capacity by more than 5 percent over a 10-year period in China. There is also a condition that can be seen as a poisonous clause, such as having to "share" profits that exceed earnings forecasts. Nevertheless, Samsung is believed to have accepted the terms to secure a local production base in consideration of the fact that artificial intelligence (AI) chip designers, such as Nvidia and Qualcomm, which are major customers, are concentrated in the U.S.

"It is important to have a production facility as close as possible to secure more orders for AI chips from local customers," a chip industry insider said.

As a result, the three companies that received huge subsidies from the U.S. government will compete fiercely for the lead in the global foundry industry. According to market research firm TrendForce, TSMC’s market share in the foundry market stood at 61.2 percent in the fourth quarter of last year, while Samsung was 11.3 percent.

The subsidies that memory company SK Hynix will receive from the U.S. is also drawing attention. The company will invest $3.87 billion to build an advanced packaging production base for AI memory in Indiana. This will be SK hynix's first U.S. plant and will mass-produce AI memory, including next-generation high-bandwidth memory (HBM).