WASHINGTON (Reuters) - The US Commerce Department said on Thursday it plans to grant $75 million to Absolics for constructing a 120,000-square-foot facility in Georgia that will supply advanced materials to the country's semiconductor industry.

The planned award to the semiconductor packaging provider, an affliate of SKC Co, which in turn is part of South Korea's second-largest conglomerate SK Group, is to come from the U.S. government's $52.7 billion U.S. semiconductor chips manufacturing and subsidy fund.

The funds will develop technology for advanced packaging, marking the first commercial facility to support the semiconductor supply chain with a new advanced material.

The Commerce Department said the award will also support 1,000 construction jobs and 200 manufacturing and R&D jobs in Covington, Georgia.

Absolics' glass substrate allows for processing and memory chips to be packed into a single device allowing for faster, more efficient computing.

The company, which was created in 2021, broke ground on the Georgia plant in November 2022. Applied Materials is an investor.

CEO Jun Rok Oh said in a statement the proposed funding will allow the company "to fully commercialize our pioneering glass substrate technology for use in high-performance computing and cutting-edge defense applications."

The Commerce Department said glass substrates from Absolics will be used to boost performance of leading-edge chips for AI and data centers.

Last month, SK Hynix, the world's second-largest memory chip maker, said it would invest $3.87 billion to build an advanced packaging plant and R&D facility for AI products in Indiana.

U.S. Commerce Secretary Gina Raimondo, who previously noted the advanced packaging substrates market is currently concentrated in Asia, has made advanced packaging a priority and said last year "the U.S. will develop multiple high-volume advanced packaging facilities."

In November, the Commerce Department disclosed details of its plans to spend $3 billion in support of advanced packaging.

The same month, Amkor Technology said it would spend $2 billion to build a new advanced packaging and test facility in Arizona that will package and test chips for Apple produced at a nearby Taiwanese chipmaker TSMC facility.

That department recently announced several major proposed awards from the chips program including $8.5 billion in grants for Intel, $6.6 billion for TSMC, $6.4 billion for South Korea's Samsung and $6.1 billion for memory chip maker Micron Technology.

(Reporting by David Shepardson; Editing by Nivedita Bhattacharjee)

By David Shepardson