Samsung to select Taylor, Texas, for $17 billion chip manufacturing plant - WSJ

By Ishika Dangayach on Nov 23, 2021 | 03:33 AM IST

• The Taylor facility is anticipated to produce advanced chips and employ around 1,800 people.

• The manufacturing unit is offered property-tax reductions of up to 92.5 percent for the first ten years

Samsung Electronics Co. plans to construct a $17 billion semiconductor facility near Taylor, Texas, WSJ reported citing sources familiar with the matter.

The report said Texas Governor Greg Abbott on Tuesday is expected to make an “economic announcement” at 5 p.m. local time.

Taylor offered the finest incentive package of the place South Korean tech giant was eyeing to build the plant. It offered property-tax reductions of up to 92.5 percent for the first ten years, with the write-offs steadily decreasing over the next few decades.

The Taylor factory, located in central Texas, intends to employ around 1,800 people, however, chip manufacturing is not scheduled to begin until the end of 2024, the report said.

Amid the Biden administration's push for increased U.S. semiconductor output, the new factory is anticipated to produce advanced chips for Samsung's contract manufacturing activities. These chips are mainly used in self-driven vehicles and power mobile devices.

Though a final choice on the location has yet to be made, the report stated.

Samsung’s massive investment in a chip manufacturing facility in Texas is second, after its decades-long semiconductor factory in Austin.

Samsung has joined competitors TSMC and Intel in developing chips in the United States, where China has a better hand in the industry.

Moreover, the South Korean tech giant intends to invest more than $205 billion over the next three years, with chip manufacturing as a top focus.

While Taiwan Semiconductor Manufacturing Co. will invest more than $100 billion to ramp up its chip production in the next three years. Intel Corp. has also announced plans to invest more than $100 billion in semiconductor manufacturing facilities in the United States and Europe during a worldwide chip supply bottleneck.

Biden’s Boost

Chipmakers are awaiting the Biden’s administration approval of $52-billion in federal incentives to enhance semiconductor production and research in the United States over the next five years

In may it was reported Senators Mark Kelly, John Cornyn, Mark Warner, and Tom Cotton have been negotiating to solve the issue of chip shortages that are affecting several industries, including automotive, as well as the increase of Chinese semiconductor production.

The fund is anticipated to be included in a package that would invest more than $110 billion in fundamental and advanced technology research in the United States to compete with China.

Inputs from WSJ

Picture Credits: Autovista24

Stock View