The US government on Monday announced a plan to award Samsung Electronics up to $6.4 billion in grants to support the tech giant’s chipmaking investment in Texas.

The subsidy is part of Washington’s broader effort to bring cutting-edge semiconductor production back to the US amid concerns the world’s largest economy is falling behind in the race to develop the chips that power artificial intelligence (AI) systems, reports DPA news agency.

Samsung plans to manufacture two-nanometre chips at the plant in Taylor, Texas. Such semiconductor technology is currently found exclusively in Asia, chiefly in Taiwan by market leader TSMC.

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This announcement came after TSMC Arizona Corporation, Intel, GlobalFoundries, the American subsidiary of BAE Systems Plc and Microchip Technology were selected as beneficiaries.

US President Joe Biden signed into law the CHIPS Act in August 2022. It provides up to $39 billion in state support to encourage manufacturers to build plants in the US.

Intel has secured $8.5 billion and TSMC was recently awarded $6.6 billion.

Samsung’s $6.4 billion will go towards expanding its Texas site, which has been under construction since 2022.

The Commerce Department plans to invest about $28 billion of the total in leading-edge chipmakers, like Samsung.

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