The US Department of Commerce and Samsung Electronics (Samsung) have signed a non-binding preliminary memorandum of terms (PMT) to provide up to $6.4 billion in direct funding under the CHIPS and Science Act. Samsung—the only semiconductor company that is a leader in both advanced memory and advanced logic technologies—is expected to invest more than $40 billion dollars in the region in the coming years, and the proposed investment would support the creation of more than 20,000 jobs.

The proposed investment would turn Samsung’s existing presence in Texas into a comprehensive ecosystem for the development and production of leading-edge chips in the United States, including two new leading-edge logic fabs, an R&D fab, and an advanced packaging facility in Taylor, as well as an expansion to their existing Austin facility.

Because of investments like Samsung’s, the United States is projected to be on track to produce roughly 20% of the world’s leading-edge logic chips by 2030.

The proposed investment would be split across multiple projects at two separate locations in Central Texas:

• Taylor, Texas: Construct a comprehensive advanced manufacturing ecosystem, ranging from leading-edge logic to advanced packaging to R&D, transforming the small municipality of Taylor into an expansive hub of leading-edge semiconductor manufacturing. This ecosystem would include two leading-edge logic foundry fabs focused on mass production of 4nm and 2nm process technologies, an R&D fab dedicated to development and research on technology generations ahead of nodes currently in production, and an advanced packaging facility producing 3D High Bandwidth Memory and 2.5D packaging, both of which have critical artificial intelligence applications. The semiconductors that are designed and manufactured in this ecosystem would serve a wide variety of end markets—from communications, automotive, and defense industries to high-performance computing and artificial intelligence.

• Austin, Texas: Expand a facility that has been an economic engine for Central Texas for nearly 30 years. This proposed investment would expand the existing facilities to support the production of leading fully depleted silicon-on-insulator (FD-SOI) process technologies for critical U.S. industries, including aerospace, defense, and automotive. This proposed investment also includes commitments to collaborate with the US Department of Defense.

In addition to the proposed direct funding of up to $6.4 billion, the company has indicated that it plans to claim the US Department of the Treasury’s Investment Tax Credit, which is expected to cover up to 25% of qualified capital expenditures.