Samsung Electronics, a leading South Korean tech giant, has hit a hurdle in its plans to receive subsidies from the US CHIPS Act. The company's ambitions to provide advanced encapsulation services in the US have been temporarily put on hold, with a focus instead on development of the next-generation 2nm process. This decision was made in response to the shrunk subsidies offered under the US CHIPS Act.
According to reports, Samsung's advanced process capacity in the US will be primarily focused on the next-generation node, while the company has paused its plans to offer advanced process + advanced encapsulation 'one-stop' services in the US market.
The US CHIPS Act, a critical legislation aimed at boosting the country's semiconductor industry, provided subsidies to companies that met certain conditions, including investing in domestic manufacturing and research. However, Samsung's subsidy has been reduced, forcing the company to adjust its plans.
As a result, Samsung's focus will now be on developing its 2nm process technology, a significant improvement over its current 3nm technology. This will enable the company to stay competitive in the rapidly evolving semiconductor market.
In conclusion, Samsung Electronics' decision to prioritize its 2nm technology development over its plans to offer advanced encapsulation services in the US is a strategic move. While this may have short-term implications for the company's US operations, it is a necessary step to ensure its long-term success in the highly competitive semiconductor industry.