Samsung makes another multibillion-dollar bet on central Texas, the tech giant confirmed on Tuesday that he chose a site in Williamson County, near Taylor, to build a $ 17 billion chip factory.
Samsung made the announcement on Tuesday – at a press conference alongside Governor Greg Abbott – nearly a year after the South Korea-based company was first reported looking for a location to build a new manufacturing plant.
Austin – where Samsung has its only manufacturing plant in the United States – was in contention, as were sites in New York and Arizona.
But Samsung’s search for a site for the new plant ultimately landed on Taylor in Williamson County, which has plenty of land for the project and where city, county and school district officials have aggressively pursued it. with incentive programs worth hundreds of millions of dollars combined.
Abbott’s office said Samsung will also receive $ 27 million from the Texas Enterprise Fund, a deal-making tool used by the governor’s office.
Dr Kinam Kim, vice president and CEO of Samsung Electronics Device Solutions, said Taylor’s new facility lays the groundwork for an important chapter in Samsung’s future.
âWith greater manufacturing capacity, we will be able to better meet the needs of our customers and contribute to the stability of the global semiconductor supply chain,â Kim said. âWe are also proud to bring more jobs and support training and talent development for local communities as Samsung celebrates 25 years of semiconductor manufacturing in the United States.
Samsung intends to build a 6 million square foot next-generation plant on the site that will be its most advanced plant to date, further strengthening the company’s ability to compete in the global chip market.
The company is expected to build the manufacturing plant on more than 1,000 acres southwest of downtown Taylor, near US 79 and County Road 401. In total, Samsung is expected to invest $ 6 billion. in buildings and property improvements, and $ 11 billion in machinery and equipment. for the facility, which should be operational by the first half of 2024 and employ more than 2,000 people. Construction is expected to start in the first half of 2022.
Taylor mayor Brandt Rydell said Samsung’s selection of Taylor was a historic moment for the city.
âThis announcement creates an economic dynamo that will fuel us and give us this energy that we have lacked for decades. It’s a really bright and exciting future, âhe said.
Ed Latson, executive director of the Austin Regional Manufacturers Association, said Taylor’s selection is a victory for the entire region.
âA facility of this magnitude is a generational investment that will have a dramatic economic impact in the community and change lives by creating well-paying jobs for Texans at all levels of education,â said Latson. “And the technology produced will keep us at the forefront of innovation in electronics.”
Matt Patton, economist at Austin-based Angelou Economics, said the planned Samsung plant will be an “economic engine” for Taylor that will fuel the development of substantial new housing in and around the small town, as well as new restaurants, hotels and other businesses. .
âIt’s huge – it’s a type of paradigm shift investmentâ for Taylor, Patton said. “That kind of money moves the needle wherever you are.”
Samsung’s plans will also benefit Travis County and Austin, he said, although not as significantly as it would have been had the plant been built within their boundaries.
What types of tax incentives have been offered to Samsung?
Throughout its search for a location, Samsung said it assesses factors such as access to talent, proximity to existing semiconductor manufacturers, speed to market and availability of incentives from local government entities.
Williamson County and Taylor have done the most among potential sites in approving incentive packages. The Taylor Independent School District has reached a deal that could generate around $ 300 million in tax savings, while Williamson County and the Town of Taylor have previously approved incentives that could be combined to Samsung’s combined $ 350 million. in the first 10 years and more in subsequent years. .
Meanwhile, in Travis County, government agencies had yet to approve any incentive deals for Samsung. According to documents filed with the state earlier this year, Samsung had asked the city of Austin for tax breaks of $ 872.5 million over 20 years, of Travis County tax breaks worth 610 , $ 5 million over 20 years, and Manor Independent School District tax breaks valued at $ 285.5 million over 10 years.
Austin was initially seen as a forerunner for the new factory as Samsung has room for expansion alongside its existing manufacturing facility. The city is home to Samsung’s largest operation outside of its headquarters in South Korea and its only manufacturing plant in the United States since 1997. Samsung’s existing factory employs around 10,000 people, including 3,000 Samsung employees, and also has an Austin-based research and development center.
Austin Mayor Steve Adler said Taylor’s selection shows the region’s potential is no longer limited to jurisdictional boundaries.
âAs we grow, the victories of Austin and neighboring cities like Taylor benefit our region as a whole and continue to mark us all as a technology hub,â he said.
The announcement also comes amid a shortage of chips affecting everything from automobiles to laptops. U.S. lawmakers, including Senator John Cornyn, R-Texas, have been pushing to pass legislation that could encourage investment by global semiconductor companies.
âI hope Texas becomes the nationwide semiconductor manufacturing hub. Samsung is certainly leading the charge, âsaid Cornyn.
Business and Industry Experts on What Taylor’s Samsung Pick Means for Central Texas
With the new Samsung plant, Taylor will join an already booming semiconductor industry in central Texas. Samsung already has a significant presence in the region, and other companies, including NXP Semiconductor and Infineon, also have facilities in the region. About a quarter of all manufacturing output in the region comes from semiconductor companies, according to the Austin Regional Manufacturers Association.
Amber Gunst, CEO of the Austin Technology Council, said the selection adds to the already excellent relationship between the tech giant and the Austin area.
âThis agreement is the continuation of a friendship between Samsung and central Texas,â Gunst said. âOur region will benefit greatly from the jobs and supplier opportunities it brings here. “
The landing of Samsung’s new facility also adds to a string of recent victories for the central Texas economy. In December, Oracle announced that it was moving its headquarters to Austin, and Tesla announced in October that it would do the same, less than a year after announcing last summer that it would build a factory for $ 1.1 billion manufacturing in Travis County.
Gunst said she expects the victories and growth of the central Texas tech industry to continue.
âAustin’s growth is no accident. The work that has been done in economic development, especially coordination across the region over the past 20 years, is paying off,â Gunst said. “I expect we will see more deals made in our region, which is why our local and state government needs to invest money in infrastructure and public transport now so that growth does not become unsustainable. and unbearable for our citizens. “
Patrick Moorhead, a tech industry analyst and founder of Austin-based consulting firm Moor Insights and Strategy, said a location in Texas was a logical choice for Samsung.
âI’m not surprised Samsung chose Texas because there are so many fabulous investments and a huge ecosystem of suppliers,â Moorhead said. “Although the cost of labor is not the most important factor, the cost of labor, land, water and electricity is lower than others States. ”
Roger Kay, an analyst at Endpoint Technologies, said Samsung probably ultimately chose Taylor because it was willing to make more concessions than Austin was prepared to.
âIt’s a big deal for Taylor and a relatively minor loss for Austin,â Kay said. He said the company would likely find it easier to find their way with Taylor in future negotiations because the city will be more dependent on Samsung than Austin. has been.
Kay said the site’s proximity to Samsung’s current plant in Austin also means being able to leverage its existing talent pool and easily move assets.
In Taylor, local leaders and residents were excited about the installation. At a joint meeting in September between Williamson County Commissioners and Taylor City Council, community members overwhelmingly expressed support for the project, saying it would bring jobs and opportunities to residents and students. . Ian Davis, owner of Taylor-based Texas Beer Company, even promised to name a beer for Samsung.
On Tuesday, Rydell said the manufacturing plant was going to change everything for Taylor.
âOver the past few years, we’ve been really focused on enhancing and revitalizing our downtown core. This takes it to a whole new level, âsaid the mayor. âWe’re going to have the fuel to nurture Taylor for years and decades to come, to realize the potential that has been there for all of these years and we haven’t been able to tap it. I think those days are over.