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| Samsung Electronics' Austin chip manufacturing plant / Courtesy of Samsung |
Taylor, Austin competing to house factory of Korea's tech giant
By Kim Bo-eun
Attention is focusing on where Samsung Electronics will finally decide to build its second foundry plant in the United States, after local authorities in Texas approved an incentive package worth several hundred million dollars, and in the face of rival chipmakers stepping up their game.
Williamson County and Taylor City Council held a joint meeting Sept. 8, where they approved the package for Samsung and took initial steps toward approving the incentives.
If Samsung goes ahead, the $17 billion, 560,000 square-meter plant would be built by January 2026, and create at least 1,800 jobs, according to multiple reports by local media outlets in Texas.
Williamson County is offering a 90 percent tax rebate worth $114 million for Samsung over 10 years, with a possible extension for another decade at an 85 percent rate, the reports said. Taylor City's incentives will provide Samsung with a 92.5 percent rebate on its property taxes for the first decade totaling around $240 million, a 90 percent rebate during the second and an 85 percent rebate during the third.
Taylor is competing with one site in Austin, two sites in Arizona and a site in New York. Travis County of Austin until recent months appeared to be the most likely candidate, given the city is currently home to Samsung's only U.S. manufacturing site. The Austin plant is its biggest operation outside of Korea, and building a second foundry plant nearby would have multiple benefits for the company. Earlier this year Samsung asked for over $800 million in tax incentives for the new plant over 20 years, and has already taken measures to use land there.
But Austin has yet to approve any incentives, according to reports. Also uncertainty looms over that location due to possible water supply issues. The Austin plant was shut down in February due to an unseasonal snowstorm and cold snap that hit Texas and resulted in power and water outages. Chip fabrication plants require ample supplies of water, which cools down equipment and cleans silicon wafers. Candidate locations in Arizona are also being seen as problematic as the state has also suffered water shortages due to a drought there.
"No decision has been made yet and Samsung continues to examine the various sites," a company official said Sunday.
But a decision is likely be reached soon, with industry sources saying that an investment plan could be unveiled by the end of this month.
Samsung is facing mounting pressure to finalize investments following the release of company head Lee Jae-yong from prison last month. The release on parole was backed by the government, which stated that the Samsung vice chairman needed to play a key role in reviving the local economy.
The chipmaker also faces tougher competition, with its Taiwanese rival TSMC investing aggressively in the U.S. and Intel also stating earlier this year that it will re-enter the foundry business.
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