IssuesLocal NewsTaxes & SpendingSamsung Chooses Taylor for $17 Billion Microchip Plant Bolstered by Hundreds of Millions in State, Local Incentives

The 1,200-acre microchip plant is considered the largest economic development investment in the State of Texas' history.
November 23, 2021
https://thetexan.news/wp-content/uploads/2021/11/Samsung-Logo-1280x853.jpg
The long sought-after $17 billion investment from one of the world’s largest hardware manufacturers is coming to Central Texas. Samsung has settled on Taylor to build its semiconductor plant, to be fully constructed by the end of January 2026.

The facility will be located on a 1,200 acre plot of land in Williamson County.

“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,” Dr. Kinam Kim, vice chairman and CEO of Samsung Electronics Device Solutions Division, said in a statement.

City of Taylor Mayor Brandt Rydell lauded the project, saying, “Samsung’s decision to locate its cutting-edge semiconductor fabrication plant in Taylor is the single most significant and consequential development for the local economy since the International & Great Northern Railroad laid tracks here in the 1870s.”

“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,” Governor Greg Abbott said at an announcement of the project on Tuesday at the governor’s mansion. Taylor had been among the finalists for the site, along with its neighbor Austin, Phoenix, or Batavia, New York.

The Texan Tumbler

Samsung plans to employ 2,000 persons and aims for the plant to be operational by the end of 2024.

The state will award Samsung with a $27 million grant from the Texas Enterprise Fund for the project.

It is expected to be the largest economic development project in the state’s history. Samsung will benefit from hundreds of millions of dollars in property tax abatements, a reduction in the taxable value of certain property. Under Chapters 311, 312, 313, and 381 of the state tax code, localities may approve abatements or tax cuts to attract businesses to their districts.

Chapter 313 abatements, the largest that are handed out, are divvied out by school districts which account for the biggest proportion of property taxes collected in the state. That chapter was not renewed by the state legislature this year and is set to expire at the end of 2022. Agreements approved before then will be grandfathered in should Chapter 313 actually expire next year.

Taylor ISD approved a 90 percent abatement for the prospective Samsung project earlier this year, a $670 million reduction in the first year of the deal. Williamson County and the City of Taylor also approved their own abatements at an indeterminate amount.

Texas has long been ranked the best state for business and its attractiveness is due in no small part to the alacrity with which localities dole out incentives. Proponents of the programs say that the incentives bring in tax dollars where they otherwise wouldn’t come. However, a 2017 study found that between 85 and 95 percent of the companies that received Chapter 313 awards would’ve moved to Texas anyway.

Regardless, Texas has been incredibly successful at attracting high-profile investments and businesses to its state. Last month, Tesla announced its headquarters would be moved from California to Austin in the eastern part of Travis County.

Samsung’s investment will be a boon to the Taylor and Williamson County economy, along with shoring up a national security concern.

The pandemic’s stress on the global supply chain has yielded a shortage of microchip semiconductors — a critical component of tech across the board for things ranging from fighter jets to smartphones.

That, added to the geopolitical strains caused by the American-Chinese tensions, makes domestic semiconductor manufacturing an issue of greater importance. In 2020, the U.S. produced just 12 percent of the world’s semiconductors. For decades, manufacturing had moved overseas to cheaper production regions.

No estimates on annual microchip production for the Samsung plant were provided.

###

Disclosure: Unlike almost every other media outlet, The Texan is not beholden to any special interests, does not apply for any type of state or federal funding, and relies exclusively on its readers for financial support. If you’d like to become one of the people we’re financially accountable to, click here to subscribe.

Get “KB's Hot Take”

A free bi-weekly commentary on current events by Konni Burton.

Brad Johnson

Brad Johnson is an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad quoting Monty Python productions and trying to calculate the airspeed velocity of an unladen swallow.