Samsung confirms Taylor will be the site of a $ 17 billion chip factory


Samsung is making another multibillion-dollar bet on central Texas, as the tech giant confirmed on Tuesday it had chosen a site in Williamson County, near Taylor, to build a 17-year-old chip factory. billions of dollars.

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.

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 is expected to be fully operational by 2025 and employ more than 2,000 people.

A home run: Williamson County officials lean over the fence in an attempt to land at the Samsung Taylor site

Dig deeper: Discussions over tax breaks are lagging between Samsung and Travis County; the impact on the future of $ 17 billion in manufacturing is unclear

Ed Latson, executive director of the Austin Regional Manufacturers Association, said Taylor’s selection is a victory for the entire region.

“A 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,” 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. .

“It’s huge – it’s a type of paradigm shift investment” for Taylor, Patton said. “That kind of money moves the needle wherever you are.”

What types of tax incentives have been offered to Samsung?

Samsung’s plans will also benefit Travis County and Austin, he said, although not as much as it would have if the plant had been built within their boundaries.

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 of up to Samsung combined up to $ 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.

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.

“This agreement is the continuation of a friendship between Samsung and central Texas,” Gunst said. “Our 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 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.

“Austin’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,” Gunst said. “I expect more deals to be made in our region, which is why our local and national 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.

“I’m not surprised Samsung chose Texas because there are so many fabulous investments and a huge ecosystem of suppliers,” 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.

“It’s a big deal for Taylor and a relatively minor loss for Austin,” 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 Smsung’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.

At the time, Taylor’s mayor Brandt Rydell also said he appreciated the opportunity to compete for the project.

“If Samsung chooses Taylor as the location for this project, it will open up a world of opportunity for this community for our businesses, for those who do business with this community, for our children,” said Rydell.


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