Huge Tax Breaks Lures Samsung’s $17 Billion Chip Plant to Texas

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A document filed with Texas state officials has revealed that Samsung Electronics Co Ltd is considering Austin, Texas, as one of the sites for a new $17 billion chip plant.

According to the South Korean firm, the chip plant could create 1,800 jobs.

Samsung is seeking combined tax abatements of $805.5 million over 20 years from Travis County and the city of Austin, among other tax breaks, according to the documents.

Samsung said in its filings that if Austin is selected, the company would break ground on the site in the second quarter of this year and that the plant will become operational in the third quarter of 2023.

Samsung’s American customers for its contract manufacturing chip business include Tesla Inc, Qualcomm Inc and Nvidia.

Samsung’s filing said it plans to make “advanced logic devices,” meaning it would aim to make the smallest, fastest kinds of computing chips for customers. The company has an existing chip plant in Austin that makes computing chips.

The documents say the project would involve building out 7 million square feet (650,000 square meters) of new space on a 640-acre (259-hectare) site that the company already owns.

Texas faces competition as U.S. Senate Majority Leader Charles E. Schumer, called on Samsung to put a factory in his home state of New York, pledging to work to secure federal incentives for the facility, which he said are key for U.S. to compete with China in boosting local chip production.

While Intel Corp makes such chips for itself in the United States, most contract manufacturers who make them for outside clients, such as Taiwan Semiconductor Manufacturing (TSMC) Co Ltd and Samsung, maintain most of their facilities in Taiwan and Korea, respectively.

TSMC, which counts Apple Inc among its major customers, last year disclosed plans for a $12 billion chip plant in Arizona expected to come online in 2024.

The filings with Texas officials were earlier reported here by the Austin American-Statesman newspaper.

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