Samsung Electronics Co. began operations in the United States in 1978 and has over 20,000 employees nationwide. One of the company’s premier facilities is its Austin Semiconductor manufacturing plant in Austin, Texas.
Operating for over 25 years, the Samsung Austin Semiconductor facility boasts employment of over 3,000 people and covers over 180 acres in the state capital. Samsung further operates on over 606 acres with 2.45 million square feet of floor space in the U.S.
The Austin plant currently manufacturers various components such as radio frequency integrated circuits, display driver integrated circuits, solid-state drive controllers, image sensors, and other microprocessors. Since 1996, Samsung is reported to have invested approximately $17 billion in this facility, “making it one of the largest direct foreign investments in U.S. history,” according to the plant’s LinkedIn page.
On Wednesday, Samsung and Texas Governor Greg Abbott jointly announced that the company is expanding its operations in the state with a new semiconductor plant to join its ranks. This plant is projected to provide an additional $17 billion in investment and ultimately employ 2,000 people when complete. Plans for the construction indicate that it will cover almost 54 million square feet of space.
A number of concessions have been made at all levels of government to incentivize Samsung to bring the plant to Texas over other sites in the U.S. that were being researched by the company. These incentives include a $27 million Texas Enterprise Fund grant to create new jobs, and a $20,000 Veteran Created Job bonus. Ad valorem tax relief was also granted by the Williamson County commissioners in September, and the company also received a waiver of $314 million in school district taxes over 10 years. In October, the City of Taylor also voted to waive the majority of property taxes via a Chapter 380 Economic Development Incentive Agreement. Samsung will also be receiving “federal incentives for domestic chip production and innovation,” according to a statement from Samsung.
Gov. Abbott indicated that the incentives will be offset by the employment and other economic impacts that the plant will have on the area.
“Samsung’s new semiconductor manufacturing facility in Taylor will bring countless opportunities for hardworking Central Texans and their families and will play a major role in our state’s continued exceptionalism in the semiconductor industry. I look forward to expanding our partnership to keep the Lone Star State a leader in advanced technology and a dynamic economic powerhouse.”
The impact is expected to begin in early 2022 when construction begins. The construction is projected to employ about 6,500 people through the completion, expected in the second half of 2024.
The new Taylor plant will join Samsung’s newest production line in Pyeongtaek, South Korea, in making semiconductors for a variety of uses. Together, these plants are expected to help relieve the global shortage of microchips used in virtually every electronic device. “As we add a new facility in Taylor, Samsung is laying the groundwork for another important chapter in our future,” Kinam Kim, vice chairman, and CEO, Samsung Electronics Device Solutions Division, said in a statement. “With greater manufacturing capacity, we will be able to better serve the needs of our customers and contribute to the stability of the global semiconductor supply chain.”
Samsung’s press release announcing the new plant indicates that it “will manufacture products based on advanced process technologies for application in areas such as mobile, 5G, high-performance computing (HPC) and artificial intelligence (AI).”
Kim also touted the effect that the plant will have on the local economy. “We are also proud to be bringing more jobs and supporting the training and talent development for local communities, as Samsung celebrates 25 years of semiconductor manufacturing in the U.S.”
In addition to the incentives, Samsung indicated the already-established relationship with the state of Texas played a role in deciding to build the plant in Taylor. “After reviewing multiple locations in the U.S. for a potential manufacturing site, the decision to invest in Taylor was based on multiple factors, including the local semiconductor ecosystem, infrastructure stability, local government support, and community development opportunities. In particular, the proximity to Samsung’s current manufacturing site in Austin, about 25 kilometers (about 15.5 miles) southwest of Taylor, allows the locations to share the necessary infrastructure and resources.”
Despite the tax breaks awarded by the Taylor Independent School District, the local education system will benefit from the investment. The Samsung press release states, “As part of its co-investment in the community, Samsung will also contribute financial support to create a Samsung Skills Center for the Taylor Independent School District (ISD) to help students develop skills for future careers as well as providing internships and recruiting opportunities.”
Even though the quantity of chips expected to be produced by the Taylor facility is currently unavailable, the addition of this plant will benefit the Taylor and Williamson County areas, but also help significantly reduce the backlog of chip orders around the world that has slowed production of virtually every electric device.